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IR35 off-payroll working legislation: is an IR35 fee payer your solution?

IR35 • Mar 22, 2023 3:35:00 PM • Written by: Georgia Reynolds

What is off-payroll working?
There is no doubt on the fact that the off-payroll working legislation will be getting implemented from April 2021 in the private sector. Many of you may still be in the dark as to what the legislation stands for. It is a tax legislation that was introduced for your contractors that operate through their limited companies. Under this legislation, contractors that are found inside IR35 are supposed to be paying taxes and national insurance as an employee would.

"With Giant as the fee-payer, you can completely rely on us for compliance and support."

MSPs what are they

When do the rules apply?
As an agency, you’ll probably want to know which of your end clients are affected by this. HMRC have
given leverage to small companies so that they can be exempt from the scope of IR35. The criteria for small companies is given as follows:
• Have an annual turnover of more than £10.2 million
• Have a balance sheet total i.e. the total amounts shown as assets in the company’s balance sheet before deducting any liabilities of more than £5.1 million
• Have more than 50 employees
Companies have to meet at least two of the above-mentioned conditions to be exempt from off-payroll work and its rules

What changes it brings?
The off-payroll working legislation was initially introduced in April 2000 for the public sector. After much delay due to the coronavirus, it is finally going to be implemented for the private sector in April 2021 where there will be a shift in responsibilities. Currently, the contractors themselves are responsible for determining their employment status and deciding whether they’re inside or outside IR35. However, from April 2021 this will be the responsibility of your end clients. Being a relevant party in the supply chain, it is important that you understand the risk shift and where the liability lies. 

What is a fee-payer?
A fee-payer is the party in the supply chain that is closest to the contactor’s limited company. It can be
you as an agency or another party in the supply chain typically known as an intermediary. A fee-payer is responsible to make appropriate deductions before paying the contractor. The role of a fee-payer is crucial, as the risk ultimately is transferred to them. A fee-payer in general has two main responsibilities:
• tax deductions
• paying HMRC

Giant IR35 fee payer
We realise that as an agency your strength lies in recruiting the best human resource possible. Other
tasks such as maintaining pay systems and making tax deductions are time-consuming and can be
costly if a mistake is made. With Giant as the fee-payer, you can completely rely on us for compliance
and support. We will take care of everything from your support with assessments of your contractors, to
reviewing their working practices on an individual basis, then to finally becoming their fee-payer, we have got it all covered for you. The benefit of availing this service for you as an agency is that we will take care of deducting the appropriate amount of taxes for your contractors Which would ultimately ensure IR35 compliance.

Off-payroll work’s implementation in the private sector will be a game changer for a lot of agencies.
Almost 73 percent of recruiters believe that IR35 would have a significant impact on the number of
contractors they hire. Successful are the companies that adapt and adjust with the changes in order
to stay ahead of competition. This is why Giant is here to assist you better in terms of making better
hiring decisions and staying compliant as ever. 

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Georgia Reynolds

Marketing Coordinator – Content