It has been nearly 2 months since the new highly anticipated IR35 regime came into force in the private sector, and helpfully HMRC has been giving us some insight into what they are expecting from clients when it comes to IR35 compliance. One thing is for certain, and that is HMRC are expecting much more from clients when it comes to showing ‘reasonable care’, and this means more than just carrying out a CEST test!
But, what is reasonable care and what does it look like in practice. Well, HMRC are looking for you to tell a story about your off-payroll staff, and be able to explain to HMRC who is off payroll, why and whether their tax status is correct. So, if you are relying solely on a CEST result, you really need to start looking beyond this tool! HMRC has indicated that the following examples could be ways of failing to take reasonable care:-
- Inaccurately completing CEST – this will happen if you fail to carry out a full assessment of the key factors on each individual contractor; or
- Group determinations – adopting a blanket approach will not be looked on kindly by HMRC; or
- Not training staff on IR35 – this was a really important factor – ensuring internal staff are trained on IR35, and their role in the status determination process.
Who needs IR35 training and why? Well, over past few months, we’ve been working with our clients to carrying out really practical training sessions for their managers, focusing on upskilling their understanding of IR35. Our training sessions focus on talking the managers through everything they need to know about the new regime, and why as a manager, it is important for them to be aware of it!
The managers are the ones on the ground with that direct relationship with the contractor – they will know the details about how that contractor works in reality, when they work, what they do and why – all of the vital information you need to know to carry out a status determination. By training the managers, you will be able to identify where the risks lie, and with our guidance in the session, we can help the managers to minimise those risk areas.
What does the 1 hour training session cover?
- IR35 – what is it, why was it introduced and why do you need to know about it?
- The IR35 assessment process – what is it all about?
- Your role as a manager in the IR35 assessment process
- What are the risk areas and how to minimise them?
- Case study exercises to demonstrate learnings
If you’re interested in booking an IR35 training session for your managers, please get in touch with @Verity Saxon and she can help create your own bespoke IR35 training session for your managers.