We recognise, despite the self-generated hype from HMRC that the implementation of IR35 within the public sector was, to say the least problematic.
Many departments decided that despite instructions from HMRC that to do so would be against the rules, the simple solution to the IR35 headache would be to declare all contractors “caught” by the legislation and therefore taxed as employees (but without any of the benefits).
Whilst that may have alleviated some of the initial pressure on procurement teams, it had the unintended consequence of, in some case wiping out entire project teams as contractors who did not wish to be taxed in this way departed for the private sector.
In quite a number of cases, this caused programmes and projects to be delayed and in some cases to grind to a halt. This is not of course the result anybody involved in this business wanted.
One of the really big problems is that the tool which HMRC developed to assess a contractor’s IR35 status has proved to be problematic. HMRC will “stand by the result of the CEST assessment” but only if the contractor “has entered all of the information correctly”. This vagueness has not reassured anybody and contractors and their hiring departments are left wondering if there will still be a “compliance knock on the door”.
We at Torsion felt that something needed to be done to address this issue so we created our own assessment service, but with the huge benefit that we will bear the liability for any tax, NI, penalties and interest accrued if we get an assessment wrong.
This assessment service is free to both client and contractor when we handle the recruitment for the post concerned.
Contact us at [email protected] or call us on 0203 921 1738 to find out how we can help you avoid the IR35 quicksand.