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What does IR35 mean for Intermediaries & end-client businesses?
The changes expected in April 2021 will impact all of those in the employment food chain. As with the Onshore Intermediaries legislation, where staffing, labour suppliers and payroll companies had to vet all self-employed contract workers, the responsibility will be placed on the end-client or project management company to qualify worker status. This will have a knock on effect to all those involved – especially the worker. Their rate of pay will be reduced by 13.8%, the cost of employer’s National Insurance, along with other employment costs.
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The new changes mean that recruiters and businesses need to re-evaluate their workforce and decide whether workers fall in or outside of IR35 (link to section what is inside what is outside) by assessing their workers' employment statuses.
Support is provided to help make this appropriate decision. Businesses can utilise the CEST tool provided by the government to determine worker’s status. The CEST tool also known as “Check Employment Status for Tax” questionnaire was designed by HMRC in March 2017 to help businesses determine whether workers are classed as employed or self-employed for tax purposes.