Uniac - July 2022

18 employment status determinations. This would provide all stakeholders to the process with a detailed schedule of the IR35 status of any given arrangement with individual contractors to ensure all requirements have been met. We would recommend that institutions consider the insurance arrangements in place to ensure that cover is in place to mitigate the risk of incorrect status determinations and potential future tax liabilities arising from these through the findings of HMRC investigation activity. In one institution, we noted that standard IR35 determination statements had been created for similar roles across departments (to avoid running an assessment for every new contractor). From our review of the legislation, care should be exercised in creating standard IR35 determination statements for similar roles as, whilst roles may appear the same they may have small differences in requirements which would cause the assessment to result in an inside IR35 determination. Given the development of the IR35 legislation since its inception in 2000, further changes by HMRC to the requirement to assess workers’ employment status for tax purposes are anticipated to ensure that the legislation remains appropriate and fairly applied to the engagement relationship between individuals and institutions. Listed below are some other areas for consideration regarding IR35 legislation: • A consideration over whether to continue to engage individuals operating through PSCs and undertaking IR35 assessments of the engagements entered or end these relationships in favour of issuing fixed term employment contracts to workers engaged. The advantage of engaging with individuals operating through PSCs is the wider access to knowledge and experience which may otherwise not be available for individuals engaged as employees. • The obvious disadvantage of engaging workers as employees is the extra burden of accounting for tax and national insurance, the cost of employers’ national insurance and auto-enrolment workplace pension responsibilities which, where an outside IR35 relationship is established are not the responsibility of the client institution. • An additional consideration is that not all institutions are necessarily the ‘end client’ for the purposes of IR35 legislation. Where an institution is considering filling a role, HMRC will consider it as the decision-maker in the process and it must issue a Status Determination Statement which should be issued to the individual engaged. Where an individual contractor’s ‘end client’ (i.e., the institution) outsources the project to a third party to manage activity, HMRC will consider that third party as the Other considerations ft

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