Changes to IR35 legislation are due to come into effect on 6 April 2021. We know how important our contract vehicle technicians and MOT testers are to keeping our clients' businesses running - that's why by now each one of our clients should have received a detailed information pack about the upcoming changes to the off-payroll working rules. Below is a brief outline of how IR35 will affect your use of our contractors.
What are off-payroll working rules?
The ‘off-payroll working rules’ make sure that individuals working like employees but through their own personal service company (PSC), pay broadly the same income tax and National Insurance Contributions (NICs) as individuals who are directly employed.
Autotech Recruit contractors are not comparable to employees and work under their own merit via their PSC company. There are some important changes to these rules from 6 April 2021.
How will this work in practice?
Where contractors are working through their own limited business, then the client must provide a Status Determination Statement (SDS) which states their employment status for tax purposes, as well as the reasons behind that determination.
HMRC has created the CEST tool to help individuals and organisations decide if an individual contractor should be treated as employed or self-employed for tax purposes.
This is the tool we require our clients to run themselves, answering the questions regarding Autotech Recruit contractors, and advise us of your result by signing the SDS forms.
We have had our three main job roles which are provided to our client base (MOT Tester, Vehicle Technician, and MOT Tester/Technician) independently audited and assessed, and we request that you do the same assessment and advise us of your result.
What happens next?
We must prepare in advance to make sure the supply of contractors into your business is not affected. Limited contractors make up half of the contract workforce available to you, therefore, if you assess our contractors differently from how we have assessed them as outside IR35 and you deem our contractors as inside IR35, there is a risk that the supply of contractors available to you could be halved, making it very difficult to cover any future bookings.
Our client IR35 pack includes our Status Determination Statement forms that we would require to be read and sign once you have done your own CEST assessment and determined if you deem Autotech Recruit contractors as falling inside or outside IR35. This needs to be signed by the person within your organisation who is ultimately responsible for IR35 and returned to Autotech Recruit at your earliest convenience.
Unfortunately, if we do not receive the required documentation back before the deadline, we may be unable to fulfill bookings after the 6th of April.