The UK government has recently released updated guidance titled ‘Help to comply with the reformed off-payroll working rules (IR35) — GfC4’, aimed at providing comprehensive instructions and information for businesses regarding compliance with the reformed off-payroll working rules, commonly known as IR35.
The guidance document, consisting of 12 separate parts, covers various aspects essential for ensuring compliance with the reformed regulations. Here’s a breakdown of what the document entails:
- Purpose, Scope, and Background
- Training Your Staff
- Record Keeping
- Considering the Requirements of a New Role
- Considering Your Off-Payroll Working Population
- What to Do If Off-Payroll Workers Are Missed
- Contracted Out Services
- Making Status Determinations
- Status Determination Statements
- Client-Led Disagreement Process
- Operating PAYE
- Outsourcing of Off-Payroll Working Responsibilities
- Internal Audit Process – Periodic Reviews
- Next Steps – Correcting Errors, Guidance, and Legislation
Part 5 of the guidance document highlights the importance of due diligence in managing the credibility and legitimacy of the labour supply chain. It specifically states that if HMRC is unable to recover any PAYE liability from other parties within the labour supply chain within a reasonable period, they may attempt to recover the liability directly from the organisation. Therefore, conducting robust checks on the credibility and legitimacy of the labour supply chain is crucial to prevent potential liabilities.
This statement suggests a shift in HMRC’s approach towards enforcing compliance with IR35 regulations. It emphasises the need for organisations to thoroughly assess and vet their labour supply chain to mitigate the risk of being held liable for PAYE liabilities.
In light of these developments, businesses are urged to review their current practises and ensure they are in line with the guidelines outlined in the updated HMRC document. By proactively addressing compliance requirements and conducting due diligence on their labour supply chains, organisations can minimise the risk of facing penalties and liabilities associated with IR35 non-compliance.
Ultimately, staying informed and proactive in complying with IR35 regulations is essential for businesses operating in the UK. The government’s new guidance provides valuable insights and recommendations to support organisations in navigating the complexities of off-payroll working rules and maintaining compliance with HMRC requirements.
For more detailed information and guidance on IR35 compliance, businesses are encouraged to refer to the full document released by HMRC and seek professional advice if needed.
Stay tuned for further updates and developments in IR35 compliance, as the landscape continues to evolve, and ensure your organisation remains compliant with the latest regulations.