Uniac - July 2022

17 employment status of workers is correctly assessed for tax purposes. In one HEI recently reviewed, it was observed that multiple stakeholders were involved in the IR35 process across different functions which positively impacted the completion of the process. • Using external agencies for the provision of contractors for services who themselves use umbrella companies, reduces the risk of exposure to non-payment of income tax and national insurance as any liabilities identified will remain with the umbrella company or the agency contracted with. A recent review of a larger HEI indicated that agencies were used where contractors were operating through umbrella companies. • Where agencies were engaged by the institution to provide contractors, the agency contract terms clearly set out the responsibility for the calculation and payment of tax and national insurance where an employment relationship was deemed to exist. Again, in one HEI recently reviewed, we observed that contractor agencies used retained responsibility for a significant part of the IR35 requirements and accounting for tax which removed the burden from the HEI. • As Status Determination Statement requirements have been introduced from April 2021, we advise that there is a clear communication framework in place for communicating employment status determinations and 7 ESM10014 - Employment Status Manual - HMRC internal manual - GOV.UK (www.gov.uk) their rationale to individuals and contractors to ensure that: i. Status Determination Statements comply with the requirements set out by HMRC 7 ii. Individuals and contractors clearly understand the determination to enable informed decision-making over whether they wish to enter a contractual arrangement with the organisation iii. All parties are clear on the arrangements in place for the provision of work by the individual or contractor. • A sufficiently comprehensive training programme for all recruiting managers with responsibility for the engagement of individuals and contractors either directly or through agency arrangements was observed in larger institutions reviewed. This was typically overseen by one area of the institution (such as HR or Finance). We would recommend that this is regularly reviewed to ensure that updates to legislation are captured and communicated on a timely basis. • Having clearly defined responsibilities within the institution for managing the IR35 process ensure that all requirements of the legislation are clearly assigned, and key components are not missed. • In one organisation, whilst IR35 requirements were satisfactorily managed, we recommended that a central repository was created and maintained to capture all IR35

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