IR35 Changes from our Agencies perspective
Over the past 18 months we have been fully aware that HMRC was planning on going down the same route in the private sector, as they did within the public sector in tightening the strings when it comes to IR35, we like anyone else just didn’t know what route they were going to go down, or quite when it would be implemented. Over the past 6 months it has become very apparent, this is real and the changes will be forced through in April 2020.
In all honesty we weren’t quite sure how this would affect us as an agency, or how it would affect our contracted staff who choose to be paid via their own LTD companies, so we have been busy at many seminars and discussions, hosted by the likes of the REC with speakers from HMRC themselves. After these we have a much better grasp on the situation and would like to distribute some information that we hope will give people a little more knowledge on the situation.
First of all, we’d like to dispel the myth that this is an agency created issue, that we are pushing through in order to make more money, this is simply not true as you will see further on. The liability does not fall with the worker, nor the agency but the end user which is the haulage company.
From April 2020, all haulage companies with more than 50 employers or £10.2m annual turnover will be responsible for assessing their contractors’ employment status for tax and will be liable for incorrect decisions. This means if a company employs a LTD company driver, be it directly through an agency, and are audited at a later date by the HMRC and find said worker was contracted instead of being employed under IR35 guidance, that company will be liable to pay that workers PAYE and employers NI contributions which would in essence mean the company paying twice for that same worker. As you can imagine some large companies currently employ hundreds of LTD drivers so this risk and burden is too high and could send companies under overnight.
After speaking with every single one of our clients and them using the tool on the .gov website which is below, most clients seem to be taking the stance that no LTD company drivers will be accepted after April 5th. This is going to cause an issue for many drivers who have ran themselves as LTD over the past however many years, but this is a matter that is simply out of our hands.
Juice Personnel run 2 methods of payment either LTD or PAYE through our own true PAYE system. Where applicable we have offered all of our current drivers the possibility to move over to PAYE when needed, and have been honest and truthful in what we believe to be a better method of payment, one that includes holiday accrual and company pension and one with guaranteed tax and NI contributions made weekly. We will also continue to accept LTD company drivers after this date although we are going to be extremely limited to clients under £10.2m that we will be able to supply to.
If you are unsure of where you stand we are more than happy to speak to you in further detail, please drop us an email ([email protected]) with your contact details on and one of us will give you a call as soon as someone is free.
For your information, below is the HMRC CEST web link for you to assess your own status.
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