- Does your business use contractors?
- Do your contractors use a PSC or Umbrella companies?
- Have you reacted to the IR35 changes?
- Are your contracts compliant?
- Is your supply chain compliant?
- How do you intend to manage the risk?
Many of our clients are recognising that they neither have the time nor the desire to manage the complexities of IR35 compliance on their own.
RedRock’s Off-Payroll Safe service is a fully comprehensive IR35 solution that is underwritten by Zurich Insurance. It is not a ‘work around’; it is a Managed Service that offers a calibrated approach to allow your business to make accurate determinations. It also guarantees that the legislation is applied correctly all the time. With visibility of the appropriate employment taxes being paid, Off-Payroll Safe also ensures that your supply chain remains compliant and your business confident in engaging specialist skills competitively and without risk.
Here's how we help
Redrock’s Off-Payroll Safe Service ensures that our customer supply chain remains compliant at all times.
Put simply, IR35 is legislation aimed at ensuring that off-payroll workers are accurately classified for tax purposes.
Introduced by HMRC in 2000, IR35 aims to distinguish ‘genuine contractors’ from ‘disguised employees'. A ‘disguised employee’ is one that supplies services to clients via an intermediary (such as a Personal Service Company) but who would otherwise be an employee if the intermediary was not used.
The HMRC estimates that only 33% of personal service companies apply IR35 legislation correctly and in doing so cause the treasury to lose out on hundreds of millions of pounds in employment tax payments each year. In a bid to reduce the impact of such non-compliance, HMRC has changed the way in which IR35 is policed, shifting responsibility for determining the application of the legislation onto end user organisations rather than individual Personal Service Companies. These changes were applied to the public sector in April 2017 and were extended to the private sector in April 2021.
Redrock’s Off-Payroll Safe Service guarantees compliance.
Off-Payroll Safe Explained
If an individual has been incorrectly determined as being outside of IR35, the HMRC will request that all unpaid PAYE tax and National Insurance Contributions be paid by the end user. In addition, HMRC have the discretion to apply a penalty of up to 100% of the initial tax liability. The severity of that penalty will depend upon a number of factors, such as how co-operative the organisation has been throughout the enquiry process and to what extent reasonable care has been taken over the application of IR35 to any off-payroll worker.
Reputational damage is a genuine prospect for businesses that fail to correctly apply the requirements of IR35, and could cause a flexible workforce to be reluctant to engage with an organisation. Many specialist Contractors fall outside the scope of IR35 which means that if your business does not take appropriate care over making IR35 determinations, there is a very real risk that obtaining highly skilled contractors could become difficult.
On the other hand, businesses that apply a genuine duty of care in making determinations not only remain compliant but remain competitive in engaging much-needed services and expertise.
Redrock’s Off-Payroll Safe Service guarantees compliance and ensures that your business can engage the services it needs with absolute confidence.