“Our brief today”, said Adrian Marlowe, MD of the recruitment and employment law specialist, “is to explain the rules and point to the options that they create. I am on record as saying that the legislation is badly drafted and I stand by that.” Referring in particular to the position that the hirer becomes the fee payer automatically in certain circumstances, Marlowe said “this is truly extraordinary, and HMRC does not appear to have thought this through. Wherever legislation contains anomalies and ambiguities, HMRC can expect those affected to review their operations, and it is incumbent on us to explain the issues and possibilities that follow. That these rules will cause confusion and disruption in the short term is in no doubt whatsoever, but some clear options do exist.”
The Lawspeed ‘knowledge is power’ seminar focused on what agencies can do to protect their margins and their commercial relationship with their public sector hirers. “The first thing is to know who you are dealing with” said Ben Grover, senior legal consultant, “it is critical to know whether a client is a public authority and this may not always be clear. Once you are sure the rules apply then make sure they are followed. For example, use of the terms ‘outside or inside IR35’ has no place within the legislation, and therefore no impact.”
“Another golden rule” said Theresa Mimnagh, associate director of Lawspeed, “is to thoroughly check the service provider who is maintaining that it can relieve you of your liabilities. There is a lot of legislation in play in this tax area and what may appear to be a simple solution could turn out to bite you in the back.”
The audience, primarily made up of agencies servicing the public sector, overwhelmingly believed that the new rules are a disaster and will be extended to the private sector in due course, the longest assessment from the audience being within 2 years.
“This was an excellent seminar”, said John Shipman of Military Medical Personnel. “We were particularly impressed at how Lawspeed highlighted the various pitfalls not the least how easy it is for clients to reach the wrong decision based on the online tool and the risk that agencies run as a result. The options Lawspeed laid out, particularly the apportionment and invoicing ideas, are well worth considering. We came away with a much better picture of how to deal with this”.
“HMRC currently says that it has no plans to extend these rules” concluded Marlowe, “but early wins for HMRC may change that. However, it is really important that agencies focus on the detail and work with the options that the legislation allows for. By carefully navigating the difficulties that the wording of the law creates, agencies can not only minimise risk but create a long term solution that is acceptable to all parties.”
For full details of Lawspeed’s public sector IR35 service visit http://www.lawspeed.com/Expertise/Recruiters/IR35_Public_Sector.aspx
