{"id":23540,"date":"2023-05-19T13:06:55","date_gmt":"2023-05-19T13:06:55","guid":{"rendered":"https:\/\/www.moorethompson.co.uk\/?p=23540"},"modified":"2023-05-19T13:06:55","modified_gmt":"2023-05-19T13:06:55","slug":"ir35-employers-must-be-aware-of-their-obligations","status":"publish","type":"post","link":"https:\/\/www.moorethompson.co.uk\/mt-hr\/payroll-press-articles\/ir35-employers-must-be-aware-of-their-obligations\/","title":{"rendered":"IR35 \u2013 Employers must be aware of their obligations"},"content":{"rendered":"

If you are a large or medium-sized business that hires off-payroll workers and contractors, it’s essential that you are familiar with IR35.<\/p>\n

What is IR35?<\/strong><\/p>\n

IR35 was established to guarantee that workers pay the appropriate taxes and National Insurance contributions (NICs).<\/p>\n

This legislation affects workers who offer their services through an intermediary, like a limited company, but would be deemed employees if engaged directly by the client.<\/p>\n

What does IR35 mean for employers?<\/strong><\/p>\n

If you engage workers via an intermediary, you must determine if the worker should be considered an employee for tax purposes.<\/p>\n

Typically, as the client, you are responsible for this decision, which can be made using the Government’s Check Employment Status for Tax (CEST) tool. While this tool isn\u2019t ideal, it will protect and help to justify any decisions that you make.<\/p>\n

If the worker is classified as an employee, you must deduct Income Tax and NICs from their pay and contribute employer NICs.<\/p>\n

Assess factors such as the worker’s control over their work, exclusivity requirements, and their integration into your business.<\/p>\n

Additionally, create a Status Determination Statement (SDS) detailing the rationale for the worker’s tax treatment.<\/p>\n

How can employers ensure compliance?<\/strong><\/p>\n

To comply with IR35, conduct a comprehensive review of your engagements with workers providing services through an intermediary. Identify any workers potentially falling under IR35 and evaluate their employment status.<\/p>\n

Consider revising contracts with workers to align with their assigned employment status. Communicate with workers about any changes to their status and its impact on pay and benefits, ensuring a smooth transition and avoiding misunderstandings or disputes.<\/p>\n

IR35 is a complex tax legislation with significant consequences for employers who engage workers through intermediaries. Compliance is crucial to avoid penalties and fines, but it can be a challenging process.<\/p>\n

We can help you make the right decisions and take the necessary steps to comply with IR35, so please contact our team at MT Pay<\/strong><\/a>. \t<\/p>\n","protected":false},"excerpt":{"rendered":"

If you are a large or medium-sized business that hires off-payroll workers and contractors, it’s essential that you are familiar with IR35. What is IR35? 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