A new tool designed to protect thousands of public sector contracting professionals and end clients from falling foul of IR35 regulations has been jointly developed by contractor tax advisor Qdos Contractor and global professional recruitment giant Hays.
The solution has been crafted to manage the new reforms on a large-scale basis while paying meticulous attention to each individual contract.
Dissatisfied with HMRC’s own online tool, which has recently been shown to be worryingly unreliable in research conducted by ContractorCalculator, numerous Central Government departments, local authorities and educational establishments have been piloting the new tool.
Previously, out of desperation to comply with the new rules and avoid stiff penalties, some public sector bodies (PSBs) had made blanket decisions that designated their entire off-payroll/contracting workforce as inside IR35 and therefore liable for employee income tax and NICs.
Needless to say, the affected contractors were deeply disgruntled, and growing numbers have chosen to leave the public sector altogether, taking their vitally needed skills with them. Earlier this year, ContractorCalculator’s CEO and founder, Dave Chaplin, urged PSBs to avoid these knee-jerk blanket decisions by transferring their contracting workforce to compliant PAYE Umbrella Companies.
This proposal would allow sufficient time for each contract to be properly evaluated. Personal service company contractors who were then caught by IR35 would retain the option of working flexibly by remaining with their Umbrella.
The new Qdos/Hays tool has already made hundreds of accurate determinations, Qdos Contractor’s CEO, Seb Maley, explained, protecting contractors, recruiters and PSB end clients in the process.
He said: “To ensure contractors aren’t unfairly determined inside IR35, it is vital that each engagement is looked at individually and by experts. Blanket determinations and inaccurate IR35 decisions will simply deter contractors from working in the public sector entirely, severely impacting temporary hiring while putting major public sector projects and services at risk.”
Mr Maley went on to explain that Hays has been working tirelessly with all parties affected by the IR35 reforms to ensure that the changes could be dealt with compliantly. Since there is no “quick fix” solution to be had, Hays worked with Qdos to develop the process and the insurance that makes the new solution an accurate means of making sure that all parties comply with their legal responsibilities.
Noting that contractors are in high demand in a context where almost half of British employers expect worsening candidate shortages in 2017, Mr Maley added: “I’m delighted Qdos Contractor has been able to provide a solution, and I am confident that this relationship will have a positive impact during times of uncertainty in public sector hiring.”
The outsourceable tool is now available to all public sector organisations.