IR35 Health Check

Is your labour supply chain compliant?

Speak to our IR35 team today for your free check up.

Our in-house payroll team operates using PAYE to ensure complete compliance.

The IR35 shaped elephant in the room: Why is no one talking about this?

Under the Criminal Finances Act 2017, corporations and partnerships can be held criminally liable if they fail to prevent their employees, agents, or others who provide services on their behalf from criminally facilitating tax evasion.

The only defence available to an end user is that it had "reasonable prevention procedures" in place to attempt to prevent any such facilitation from taking place; for example, through staff training and a robust written policy.

Having spent 17 years of my career in Recruitment, the last ten as Managing Director of Baxter Personnel I have witnessed an amazing amount of changes over the years but the impact of IR35 being rolled out to the private sector coupled with the above statement is going to have a real bearing on you as an end user.

In a nutshell: if you use agency staff anywhere in your organisation and the recruitment agency or the Umbrellas or mini Umbrellas behind them are not TAX compliant then without "reasonable prevention procedures" i.e. an audit trail you may have a very big problem in regards to the above finance act. This is our elephant!

Some end users I speak with are not aware of or even care about some of the payroll "schemes" their agency temporary workers are working under and in a lot of cases assume the temporary workers work directly for the agency and are paid directly via PAYE and therefore sit outside IR35. This is a very dangerous and incorrect assumption.

On many occasions recruitment agencies outsource their payroll to Umbrella companies. This is where the problems start. Now don't get me wrong not all Umbrellas are non-compliant - in fact they provide a vital service to the industry and their services are widely utilised.