Making final preparations for IR35

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As the 6^th April 2021 deadline fast approaches, all eyes will be on the clock to ensure preparations are underway to make accurate IR35 status determination statements (SDS) across your organisation’s Private Sector contractor workforce.

We look at the final piece in the puzzle, engaging the HR team to ensure effective, consistent, and compliant communication.

Engaging the right people

Recent guidance from the Chartered Institute of Personnel and Development (CIPD) rightly points out that managing IR35 will involve a large team from across your organisation.

Even where a special project team has been established to understand the legislation and devise your organisation’s strategy to ensuring compliance, HR teams and Hiring Managers will also need to be engaged to manage the communication – both within the business and externally to the impacted contractors.

“HR will need to set up a process outlining when and how contractors will get their status determination statements (SDS) from the employer, as well as creating a process for appeal for those individuals who might question their SDS.”

– Charles Cotton, CIPD Research and Policy Adviser

CIPD recommends organisations work with their HR team to develop a communications plan to ensure Hiring Managers understand what information they need to issue to their off-payroll contractors, and crucially when they need to provide the information – making sure a consistent message is delivered across the off-payroll workforce.

Crucially, this information will also need to be passed down the employment chain – in accordance with HMRC’s requirements when issuing each SDS. For organisations with a complex resourcing model managing multiple recruitment agencies, the support of a central outsourced solutions provider such as Linx can help to identify the organisation’s legal requirements for passing down the SDS – and help avoid the financial liability incurred for failing to do so.

HR departments will also need to ensure they can evidence, if challenged by HMRC, that anyone making Status Determination Statements (SDS) has taken reasonable care – including recording training and communication logs.

Preparing for SDS disputes

Planning ahead for when each SDS comes into force, HR departments and organisations will also need to ensure they have developed a robust dispute process, to handle any status disagreements that off-payroll workers may lodge.

Should they receive any from contractors falling in scope who wish to challenge the determination, the organisation must respond to the contractor within 45 days – detailing the outcome of their investigation. This means organisations will need to ensure they have a consistent internal process and transparency chain for responsibility.

Reference: CIPD Voice, Issue 27