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Phillip Hammond confirmed in the 2018 Autumn Budget that changes to off-payroll in the private sector would be rolled out in April 2020 – giving everyone a grace period of over a year. However, this doesn’t mean that recruitment agencies have until April 2020 to prepare. Our article will explain the implications off-payroll in the private sector will have on the recruitment sector and private sector end-clients.
What is off-payroll in the private sector?
From April 2020, businesses in the private sector will be required to make IR35 assessments for every contractor in their workforce – but only if they are a medium or large organisation. Consequently, the liability for making the IR35 assessments will fall on the end-client and if the contractor has been placed by a recruitment agency, the agency must ensure they make the correct tax and National Insurance Contributions (NICs) to their pay.
These changes highlight the importance of a good working relationship between recruitment agencies and their private sector clients. Without a thorough understanding of off-payroll in the private sector, both parties risk upsetting contractors with incorrect IR35 assessments that result in an instant decrease in their take home pay.
April 2020? No – you only have until April 2019 to prepare…
Just because the changes come into effect in April 2020, it doesn’t mean you can wait until then before you take action. Our infographic below explains a situation that you will want to avoid with your candidates.
Your preparation should have already started
In order to prepare successfully for the upcoming changes in legislation, Churchill Knight recommends:
- You are familiar with all of the compliant operating structures for candidates both inside and outside IR35. These include personal service companies, umbrella companies, sole trader and PAYE.
- Help educate your clients on the changes and arrange meetings with them at your earliest convenience. Showing your expert knowledge now will help strengthen your professional relationships and make you stand out from the competition.
- Help your clients get organised and create profiles for the roles you are working on (e.g. identify which ones are likely to be inside IR35, which ones are likely to be outside, which ones need a thorough review, etc.).
- Keep a close eye on future publications from HMRC, including the technical consultation that is occurring soon (early 2019).
- Update your Preferred Supplier List (PSL) and only have providers on it who are:
- Independently audited by a leading professional body, such as Professional Passport.
- Offering the legal payroll options that your candidates need, as listed in point 1 above.
- Up-to-date with off-payroll in the private sector and who are happy to come to your office and present to your consultants.
Contact us to schedule free training at your agency
Churchill Knight has already been asked by numerous agency partners to attend meetings with them and their private sector clients. Our Business Development Managers are ready to provide this service – free of charge. Please contact us now on 0808 2525533 or email agency@churchill-knight.co.uk.
Did you know?
Churchill Knight has recently hosted two seminars in London, exclusively for recruitment agencies to learn about off-payroll in the private sector. Crawford Temple, CEO at Professional Passport was our special guest and the feedback we have received from the dozens of consultants in attendance has been fantastic.
You can find out more about our seminars here, as well as download our official off-payroll booklet and view the slides from the events.
Register your Interest for Upcoming Events
With the changes to off-payroll in the private sector coming into effect in 2020, your recruitment agency does not have much time to prepare! However, with the support of Churchill Knight, you’re in safe hands.
To be kept up to date with our latest events and to ensure you’re the first to receive an invitation, please call us on 01707 671645 or complete the short form below.
We're regularly adding new, helpful content
The Churchill Knight blog is regularly updated with helpful content for contractors and freelancers – especially articles that answer the most frequently asked questions about umbrella companies! Please pop back shortly to see the latest articles written by Andrew Trodden (Marketing Manager) and Clare Denison (Marketing Executive).