Uniac - July 2022

15 From 06/04/2021, all organisations covered by the IR35 legislation (both public and private sector) are required to determine the employment status for tax purposes of every worker who operates through their own intermediary, even if they are provided through an agency. An additional requirement is that any determination made should be communicated to the individuals using a’ Status Determination Statement’ (‘SDS’).6 Government guidance states that an SDS must: i. be passed to the worker and the person or organisation you contract with ii. give your conclusion and the reasons for coming to it. To support this, organisations are expected to: i. take ‘reasonable care’ when making a determination ii. make sure detailed records of employment status determinations are retained (including the reasons for the determination and fees paid) iii. have processes in place to deal with any disagreements that arise from determinations made 6 April 2021 changes to off-payroll working for clients - GOV.UK (www.gov.uk) iv. confirm the size of your organisation (if asked by the person or organisation you contract with, or the worker directly. Where it is deemed that the IR35 legislation applies to the worker engaged, the organisation performing the assessment is required to calculate the tax and national insurance applicable. The following risks should be fully considered to ensure that IR35 processes in place are fit for purpose in demonstrating compliance: • The institution is unable to demonstrate to HMRC that it has exercised reasonable care when determining the employment status of workers. This may be more of an issue in HEIs where several stakeholders input into the assessment process and incorrect reliance is placed on other areas to complete required checking. • Workers may be incorrectly assessed when determining whether IR35 or employment status rules apply potentially resulting in liabilities which have not been identified through the assessment. • The institution may make incorrect PAYE and National Insurance payments to HMRC due to incorrectly determining the employment status of workers, potentially Key risks to IR35 compliance IR35 Legislation changes from April 2021 ft