Seven Simple Steps to IR35 Legal Compliance for Recruiters

The IR35 legislation changes are just around the corner. The closer we get to April 6^th the more crucial it is that we all understand just what that means. We need to be confident in what responsibilities we have to take when the changes are finally implemented and how to ensure IR35 legal compliance for recruiters. The changes mean that the responsibility for determining the IR35 status of contractors is moving from the contractor to the end client. As a recruiter your resource pool could dramatically change as could your legal obligations.

Replicating public sector changes

If you have been working within the public sector at all, you will already have a full understanding of the new obligations. This is because 3 years ago the public sector already saw the introduction of the reforms, meaning we have a clear picture of a recruiter’s responsibilities going in. As of this April, all recruiters placing a contractor through a personal service company (PSC), public or private sector, will have to bear in mind the legislation changes. Therefore, we have put together some simple steps for recruiters to make sure they are compliant moving forward.

7 simple steps

1. Read the government guidance – Take the time to read through the material supplied by the government to fully understand the reform.   
2. Speak with each end client – Have a conversation with your end clients before April 6^th to make sure that you understand their viewpoint on the changes. They may have already made a blanket decision on whether they will be accepting PSC contractors or not.
3. Communicate with contractors – With the information gained from your clients you will be able to communicate a situation early in the process with a contractor saving you time later down the road.
4. Count up your current PSC contractors – Run an internal audit in the coming months and get a good idea of the number of contractors already working through you using a PSC.
5. Take a note of end dates – Keep an eye on the end dates of the contractors counted above and take note of any that extend past 6^th April 2021. Flag these to your end client and ask about their plans regarding the assignments.
6. Consider the fee payer –   If you are currently acting as the fee payer for a contractor you will now be responsible for tax and National Insurance deductions.
7. Seek advice when needed – Most importantly seek appropriate advice when you are unsure. Whether that be speaking to an Umbrella company or an IR35 specialist.

It is easy to become overwhelmed by all the jargon surrounding the IR35 reform. Whilst our steps are by no means completely comprehensive, we hope that they will relieve some of the pressure.

Got more questions?

Here at Husp we are always happy to discuss the legislation changes and what they could mean for you going forward. Please feel free to contact us on 0333 003 7891.