IR35 specialist Qdos Contractor have issued extensive practical advice for self-employed individuals, employment agencies, engagers, and end users about a week before the expected Budget 2018.

The advisory firm has stated that private sector businesses and contractors should prepare for the expected extension of IR35 to the sector.

Workers whose work fall inside the IR35 will be required to pay national insurance contributions (NICs) and PAYE. Those whose work falls outside IR35 should receive relevant and consistent information about any internal changes made by the engager that can have an impact on the rules. Keeping workers informed is critical so that they don’t abandon their work and walk out due to perceived injustice.

Seb Maley, chief executive at Qdos, had advised the end clients that irrespective of whether the IR35 extension is announced in 2019 or 2020, they should prepare for its implementation. Early preparation will help in successfully meeting the requirement of IR35. This will ensure that firms avoid costly fines from HMRC for not complying with the legislative requirements.

Advise to Engagers, Agencies, End Users, and Contractors

The firm has advised engagers to train internal staff on how to assess status and relay required information to the agency.

Agencies have been encouraged to review existing systems to ensure that correct inside/outside IR35 payments are made. Qdos have advised them to establish a clear communication channel with engagers and keep a record of any payments to contractors. Also, they should use the Check for Employment Status Tool (CEST) to check the status of employees. While the tools should not be solely relied upon to know about IR35 status, it will give an idea of what results to expect.

End users have been advised to review each engagement on merit and avoid any shortcuts such as blanket assessments. Some of the advice given to agencies overlap with the advice to end users. This is because the IR35 framework also has certain overlaps. The income will be deducted at the source which means that the responsibility to make payments will fall either on the recruitment agency or the end client business.

Contractors are advised to voice their opinions, encourage agency and end client to contact an independent IR35 advisory firm. The independent advisory firm will be in a position to give honest unbiased advice regarding the employment status.