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IR35 Reform: How it Affects Recruiters

From April 2021, most contractors will no-longer be responsible for determining their own IR35 status. Instead, your end clients will be responsible and liable, unless they class as a small private company – but what does this mean for you as a recruiter?

Download our free guide for recruiters: Helping Your Clients Prepare for IR35 Reform>>

Your clients will need your advice

IR35

For most end clients, hiring contractors is a small part of what they do. They have other important business to think about and will expect you, as a recruitment expert, to be able to advise them about IR35.

If you’re not confident that you can answer all their questions, you may need to undertake training, or sign-post your clients to compliance experts like Orange Genie. 

Where the client makes "outside" IR35 decisions

While this is usually the ideal outcome, if the client’s determination is incorrect, as the “fee payer” (the party who paid the contractor’s limited company) you may be liable for any unpaid tax and NICs.

For this reason, it’s very important to make sure your clients have robust processes for determining IR35 status.

IR35

Where the client makes "inside" IR35 decisions

IR35

In this case, you and the client are less likely to face compliance challenges from HMRC, but your contractors will take home less money, and there will be additional costs.

This makes contractors more expensive and retention more difficult, particularly where key skills are in demand. 

How to turn the situation to your advantage

The entire contracting industry will have to deal with these issues in the run-up to April 2021, and the competitive advantage will lie with recruiters who prepare early, give their clients the best advice and keep their contractors informed.


The first step is to involve Orange Genie Compliance. We can organise training for you and your staff, and help your clients quickly assess their contingent workforce and mitigate these risks. Our process is fast, convenient, and completely virtual so there are no social distancing issues. 

IR35

 

If you have questions or if we can help in any way, please call our expert team on 01296 4684 483 or email info@orangegenie.com

 

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