As the recruitment and supply industry has evolved, so have the tax rules.

On the face of it, tax rules for agencies, contractors and workers should be fairly straightforward. All the tax rules are generally based on the employment status of an individual as regards the work being undertaken. Liability for tax then follows as determined by the legislation, usually ITEPA.

Unfortunately, the reality of making a determination is often far from simple.

Unfortunately, the reality of making such a determination is often far from simple.

Since 1975 recruitment agencies have generally been required to pay employment tax and NICs on payments made to individual agency workers. IR35 has been around since year 2000, and since 6th April 2017 new rules (Chapter 10 “IR35”) have applied to recruitment businesses that supply contractors to public authorities. Other rules apply to ‘false self employment’ and various freelancer and contractor payroll models, and HMRC is set upon its campaign to tackle tax avoidance. In May 2018 the Treasury launched a consultation into extending the Chapter 10 “IR35” rules to the private sector, and it appears increasingly likely that this extension will be brought into play in April 2019.

The rules are complex in many cases. The consequence is that, whether or not direct liability for unpaid levels of tax is imposed on businesses or their directors, a plethora of risks is in play ready to catch the unwary.

a plethora of risks is in play ready to catch the unwary

As IR35 once again appears to top many agencies’ area of interest, Lawspeed offers key services, contracts and support. Employment status for both tax and actual employment purposes is central to all our work, factoring directly into our all our products, including Lawspeed recruitment contracts and terms of business, which comprehensively address PAYE, IR35, umbrella, consultancy and other model arrangements.

For recruitment agencies, hirers and contractors we also offer IR35 contract terms reviews as well as representation and advice in the event of an HMRC investigation. Our independent SPA accreditation is open to umbrella companies and service providers, and helps both agencies and hirers assess relevant risk; necessary to make informed decisions and recommendations, whilst at the same time showcasing the provider’s compliance credentials.

Please contact us with your enquiry. 01273 236236