IR35 in the private sector

Helping you prepare for the changes

In April 2020, new changes to IR35 in the private sector will come into effect, with significant implications for organisations and their people. 

The changes mean that the end user will now be responsible for determining tax status for contractors from April 2020. The end-user will have the responsibility to make the status determination and the fee payer will have to operate PAYE and NIC as required. 

This will impact across all areas of business, from HR to finance and procurement. It’s critical for organisations to act now to prepare and mitigate any potential disruption or risk of non-compliance.

Are you prepared for the changes in April 2020?

Can you identify your off-payroll community and understand how they would be classified under the regulations?

Do you have a plan for how you communicate the changes and their impacts to your internal and external stakeholders?

Are you measuring the key performance metrics for your contractors to understand operational considerations?

Are you prepared for the cost implications of additional costs like the Apprenticeship Levy or increased contractor fees?

Do you know what this will mean for your contractor payroll administration?

Have you updated your onboarding process to ensure you are carrying out an accurate tax status assessment?

How we can help 

We have a team of tax and technology specialists who have experience in supporting clients to manage the transition to the new rules. 

We start with an in depth consulting exercise to prepare you for April 2020 and use the latest technology to automate stages of the IR35 compliance process. Our teams have a collaborative approach with Government bodies, including HM Treasury, HM Revenue and Customs and BEIS meaning they can provide expert, practical advice on what the changes will mean for your business. 

Using technology can streamline your approach to IR35, from gathering an initial impact analysis to accurate reporting and management of a flexible workforce.

Our tools

Workforce Intelligence Application

Identifies and assesses the impact of key workforce issues including salary distribution and efficiency of delivery.

Identify Tool

Assists with the identification of PSCs. This process accesses Companies’ House to check for details on all organisations that you are paying.

Status Determination Tool

Helps to reduce the number of ‘undetermined’ status decisions and provides more clarity and less ambiguity for those individuals where the position is less certain

Flexible Workforce Hub

Manages sourcing, contracting, timesheeting and payment of flexible workers - it gives an organisation a clear process to follow when engaging with casual workers, ensures compliance with employment tax and pensions legislation and gives organisations full visibility over their spend on this area of workforce. 

Case study

What was the challenge?

We worked with a large public sector organisation which has a high dependence on flexible workers and contractors. They previously had no central process for managing these engagements, with no visibility of the associated costs and no way of easily tracking or identifying the status of each of the workers. This became particularly problematic with the introduction of the new IR35 rules in the Public Sector.

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How did we help?

We worked alongside the organisation to review existing internal processes, up-skill teams and implement The Flexible Workforce Hub. This meant that the organisation could engage with workers/ contractors on a centralised platform to manage the IR35 compliance tasks and ensure correct assessments are carried out. They can now send an updated contract appropriate for the type of work and nature of the worker and fix pay rates, shift patterns and contract length.

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What were the outcomes?

The organisation now has full visibility over its contractor population, the costs associated with those contractors and control over the length of time each engagement lasts. The technology-enabled approach has streamlined processes and given clear and valuable insight across their workforce.

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Contact us

Julian Sansum

Head of Employment Tax, PwC United Kingdom

Tel: +44 (0) 7919 057454

Fiona Camenzuli

People & Organisation Network Leader, PwC United Kingdom

Tel: +44 (0)7739 876723

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