Reduce IR35 and Compliance Risks: 5 Reasons for Recruiters to Use an Accountancy ASL

IR35

It seems these days that compliance issues are constantly at the top of the agenda in the recruitment industry, and with possible IR35 reform approaching in the private sector that doesn’t look set to change. Which is why we think it’s worth implementing an approved supplier list (ASL) for accountants.

How to Help your Clients Prepare for IR35 Reform: A Recruiter's Guide: click here to download >>

We understand that this is a controversial idea. Traditionally contractors expect to choose their own accountants, and if the recruiter has any input it’s in the form of an arms-length recommendation. On paper this looks reasonable, after all the accountant provides a service for the contractor’s limited company (PSC) and is not engaged by you as a recruiter. You don’t necessarily have any relationship with the accountant at all, so why would you demand a say in which one the contractor engages?

Here are some reasons why it makes sense for you to use an ASL for contractor accountants.

Using a specialist accountant is good for your contractors

Contractor PSCs operate differently from most other small businesses, and require different expertise, and yet a large proportion of contractors engage generalist high-street accountants. Your contractors will get better advice, be more likely to succeed and will ultimately make more money if you steer them towards specialist contractor accountants.

Specialist contractor accountants understand IR35

One of the ways a PSC differs from most small businesses is that they have to consider IR35. We often hear from contractors who have received shockingly bad advice from high-street accountants, some of which had led to accidental non-compliance. A specialist contractor accountant will be familiar with IR35 and able to advise correctly. This is obviously good for the contractor, and it’s good for you because it will improve compliance in your supply chain.

FCSA accredited accountants will improve your compliance

The Freelancer and Contractor Services Association vet their members using the most rigorous standards in the industry, so if you’re going to create an ASL of contractor accountants it makes sense to insist that they’re all Accredited Members of FCSA. To achieve accreditation, accountants need to have a determination to do things properly at the heart of their culture and outlook. Having close relationships with this kind of company can only help your own compliance.

You know your contractors will be well treated

You will naturally develop close relationships with the accountants on your ASL, who will appreciate the business you’re sending their way. Through these relationships you can ensure that your contractors receive the best service and advice, and this in turn will reflect well on you because you advised the contractor to choose that accountant.

You are responsible for compliance in your supply chain

The criminal finance act makes you responsible for ensuring compliance in your supply chain. You’re expected to take “reasonable steps” to prevent tax evasion, and that includes ensuring the contractors you engage have access to proper advice and guidance. The PSC’s accountant is engaged as an expert advisor for the contractor, and while you have no relationship with them they will remain the most-likely weak-point in your supply chain’s compliance.

It’s becoming increasingly necessary for recruiters to have control of their supply chains, and that includes ensuring that your contractors are getting the right help and advice from their accountant.

If you need help or have questions about implementing an Accountancy ASL or if we can help in any way, please contact our expert team on 01296 468483 or email info@orangegenie.com

 

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