Here we find ourselves still in the midst of a global pandemic and still trying to navigate the other big issues including Brexit and IR35, not to mention mask on/off, queuing for the toilet and confusing one way systems!
So to get you thinking differently about IR35 we wanted to put forward this opinion:
If you’re a client or company that hires contractors think about when the pandemic first hit and you sent everyone home to work, did you pay your contractors to sit at home and not do any work because you either didn’t have anything for them to do or because they can’t perform their duties from home? No, you finished their contracts with minimal notice possible because that is the purpose of a contractor, you only pay for them when you need them and it’s what sets them apart from your employees – there is no mutual obligation. So why are we now being forced into treating contractors as ‘zero benefits employees’ that must pay tax in the same way an employee does even though they have risk of not being paid/working, no statutory pay rights and no benefits.
So, now is the time, rather than changing how you pay all your contractors, consider ensuring that you treat your contractors as contractors, ensure they are identified as external contractors, ensure you don’t book or pay up front for expenses but you reimburse after the contractor has incurred them and train your hiring managers to know what tools/equipment that contractor should be providing as part of their contract and essentially how to treat a contractor. Don’t just accept that everyone is in scope of IR35.
Look into how your agencies engage with their contractors, as with MPI, all contractors should be engaged under a contract for services – this means that they are engaged in the correct and appropriate manner. Make sure that agency isn’t taking any up front deductions for PPE, insurance, training courses from the contractors or paying retainers as all these things point to employment rather than engagement.
If you’re a contractor – then make sure you work for more than one client company where possible, have the right tools/equipment/, training/competence and insurance to perform the duties required and show the costs in your accounts. Remember, you are not engaged in a contract of service where by the client asks you to do something and you have to do it, you can say no and finish the contract just as the client can if you don’t want to work in the way they want, they have the right to finish the contract with your company and find another company.
If you would like to discuss in more detail then please email offpayroll@mpi.ltd.uk and we will respond as soon as possible.