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Why Recruiters Need to Understand IR35

IR35

If you’re a recruitment consultant and you understand the detail of IR35, you’re in a vanishingly small minority. Whenever we raise this topic with recruiters, some have a vague idea that it has something to do with a contractor’s tax, but it’s rare that anyone can explain it in any more detail. This is understandable, because recruiters have other things to think about and it may look from your point of view like it doesn’t affect you. In this article we’ll explain why you need a working knowledge of IR35, and how you can achieve this.

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Your contractors need information about IR35

It’s likely that some of your contractors will be trading through  their own limited company, or will be considering doing so, and those contractors need accurate information about IR35 so they can make informed decisions. At the very least, you need to be able to explain what it is, why the contractor needs to care about it, and where they can get further information. In other words, you won’t be able to support your contractors adequately unless understand the legislation enough to explain it in a simple way.

IR35 affects your clients

If you have clients in the Public Sector, they are already responsible for determining IR35 status. Many will already be aware of it and how it affects them, and will expect you as a recruitment expert to be able to discuss and resolve IR35 issues and questions. Some, particularly those who have not engaged many contractors in the past, may seek your advice and they will need you to be an expert, or be able to refer them to someone who is.

Large and medium private-sector clients will be responsible for determining IR35 status from April 2021, which means clients who traditionally did not need to involve themselves now need to adjust and prepare for a new series of responsibilities, costs and risks.

Because IR35 sits in the recruitment space, your clients will expect you to know about it. Those who are not yet aware need to be informed as soon as possible, and if you don’t discuss it with them you’re missing an opportunity to reinforce your position as their trusted advisor. Again, at the very least you’ll need to be able to explain what it is, how it will affect your clients in April 2021, why it’s important that they act now and where they can go for help.

Do you need IR35 training?

If you’re not confident that you, or your colleagues or staff, would be able to explain IR35 to your contractors or discuss it with your clients, you may need to arrange training. If you’re not sure, try answering these three questions:

  • What is IR35?
  • What’s the difference between contractors who are inside or outside?
  • How does IR35 status affect a contractor’s take home pay?

If you have any trouble answering any of these in a way that would satisfy a contractor or client, then you would almost certainly benefit from training.

Where to go for help

Having decided that you need to arrange training, the next step is to contact a compliance expert, like Orange Genie Compliance, to arrange it. Our experts can provide online training sessions at your convenience using the platform of your choice and they’ll be happy to answer any ongoing questions you might have once the training is complete. Click here to find the latest IR35 news

If you have any questions, or if we can help in any way, please call our expert team on 01296 468 483 or email info@orangegenie.com.

 

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