Recruiters supplying contracting professionals to public sector bodies (PSBs) have a powerful new resource at their disposal to ensure that they never fall foul of stringent new IR35 regulations: InLine Outsourcing, a meticulously researched and highly accurate solution for determining IR35 status on a case-by-case basis – without error.
Many recruiters and PSBs, who became the parties responsible for determining public sector contractors’ tax status if they were closest to these independent professionals in the payment chain, have been profoundly dissatisfied with the online Employment Status Service provided by HMRC. Recent research by ContractorCalculator found that it returned a high proportion of inaccurate results when fed with the details of IR35 cases that had already been through the courts.
In frantic efforts to comply with the new rules, a number of PSBs resorted to making blanket IR35 determinations, placing all their off-payroll contracting professionals within the new regulations. This forced contractors to pay employee income tax and NICs, despite the fact that as personal service company workers, they enjoy none of the statutory employment benefits that these taxes pay for.
Recruiters, meanwhile, have seen their potential liabilities multiply over the years when placing contractors and temporary workers, as HMRC has progressively stepped up its compliance and change activities within this area. They must now contend with Umbrella Company compliance, RTI reporting, transfer of debt, Agency Worker Regulations, holiday pay, pensions and (for PAYE workers) the Apprenticeship Levy.
The latest regulatory burden to hit recruiters has been the reformed IR35 legislation, which makes them liable for any missing tax and NICs that were unpaid as a result of an inaccurate tax status determination.
InLine is ideally placed to provide a much-needed solution for recruiters facing this latest issue. The company has in-depth knowledge of IR35 and all the legislation surrounding it, along with an unblemished track record of providing fully compliant payment solutions for the contracting industry dating back to 2001, when the latter really began to make its new presence felt.
So confident is InLine in the accuracy of its solution that, as its name implies, it places itself “in line” to be the closest party that takes responsibility and liability for income tax and NICs instead of recruitment companies. Instead of paying the contractor directly, the recruiter pays InLine, which becomes the party responsible for paying the personal service company professional instead.
In addition, InLine is able to take on Umbrella Company and PAYE responsibility, leaving recruiters free to concentrate on recruiting.
This highly flexible product will be custom-fit to the current requirements of each recruiter. InLine can be contacted for a tailored quotation and specific solution here.