In December last year, Access teamed up with APSCo to deliver an exceptionally well-attended webinar on the latest updates on IR35, evidencing that this is still a popular topic in the industry! In case you missed it, you can watch the webinar on demand here.

Tania Bowers, General Counsel from APSCo presented the latest update on what’s been happening around IR35 and talked through what agencies should be doing to prepare themselves and their clients for the potentially imminent rollout of the new private sector legislation.

Prior to the recent general election, the Conservatives had indicated that they were likely to agree to a review of IR35. Whilst this suggests a possible delay to the implementation of this legislation, APSCo’s advice is to keep pushing ahead and continue preparing clients for the planned go-live in April 2021.

Are your clients ready for IR35?

Before looking into the points covered in the webinar, APSCO ran through a series of poll questions with the attendees to get a general sense of awareness of the topic. Here were the findings:

The results clearly showed that the awareness of IR35 is increasing across the private sector, however this doesn’t directly translate into action being taken, with almost a 50/50 split in responses about whether or not their clients were preparing for the changes.

Unsurprisingly, the results also showed evidence of contractor resistance in moving towards an umbrella solution or working inside IR35. Tania alluded to the fact that unfortunately as the months go on, this resistance is likely to increase.

Tania then also ran through the following points:

• Small Business Exemptions to IR35
• Client obligations (for Medium and Large clients) under the new regulations
• Issues that clients should take into account when setting up a status determination process
• Criteria that clients need to take into account when determining assignment status
• Fee payer obligations under the new regulations
• Transfer of liability – Five situations in which the fee payer liability can be transferred
• Status determination disagreements
• What to consider if the fee-payer is offshore
• Action plans
• Potential models that fall both outside and inside IR35

What is the market saying?

Following Tania’s presentation, Cara Spiers and Ben Oliver, Access Pay and Bill solution specialists, highlighted some of the questions that Access have seen in the market about IR35. We’ve listed these questions along with their answers below:

Is private sector IR35 available as per HMRC Specifications within the system? 

Public sector IR35 has been in place for 2 years. The new private legislation is in development at the moment and this will be released shortly. Please contact The Access Group for more information. 

How are public sector IR35 requirements captured and processed in Access Pay and Bill?

Via manual input, CSV import or web interface simply set the “Contractors Subject to PAYE” flag on the Client or the Assignments. The system itself will then calculate if the worker is applicable (Not CIS, Umbrella or Managed Agency) and apply the relevant taxation automatically as the payroll is run.

The payments are collected and you can assign you own nominal code for output and payment to HMRC of the due tax via your accounts package. All payslip details are automatically produced and invoicing as normal. And changes in payments (adjustments) will also be automatically calculated by the systems payroll engine.

How are LCC’s outside IR35 that use an umbrella company identified separately from other LCC’s outside IR35? 

Any users of Pay and Bill will know that each of the suppliers entered onto the system has a type defined. The types are: Ltd Company; Self Employed; Partnership; Construction; Industry Scheme (CIS); Managed Agency; Umbrella.

The last three options are outside of IR35. Suppliers also have an EIR engagement status which indicates whether or not they are included in the statutory Employment Intermediary Report.

If I have a contractor that goes in and out of IR35, how does Access Pay and Bill react to this complex situation? 

IR35 legislation is determined by the size and type of client requesting your services, Access Pay and Bill tracks specific client info and allows assignment specific IR35 designation.

This means a client with a mix of roles within one week can submit their timesheets and Access Pay and Bill will move them in and out of IR35 processing the correct tax, day to day or even hour to hour.

What changes have been implemented within Access Pay and Bill? 

The changes for the new IR35 given that Access Pay has an established track record have been very straight forward and neat. Effectively we are simply opening up the existing functionality to all clients rather than saying you must be public sector. Any client has the ability of facilitating IR35.

What can the Access Pay and Bill do in terms of aiding the transition to the new IR35 rules?

We have implemented new features embedded in the product which have expanded the suite of take on functionality to allow you to apply the appropriate IR35 settings to what will be 100s of existing clients and assignments.

For more resources on this topic, you can visit our IR35 hub, packed with guides, factsheets and FAQs to ensure you have the ultimate compliance peace of mind.