Larsen Howie’s Head of Tax, Andy Vessey, is giving a talk today at a conference held by Business Forums International (BFI) about preparing for IR35. The event, titled IR35 Planning and Preparation Conference: Compliance – Contracts – Organisational Solutions – A Practical Guide, will help business owners understand what procedures need to be put in place to ensure the limited company contractors they engage are outside the legislation.
BFI has been delivering HR knowledge to global and national organisations for over 20 years through world-class conferences and training events. They pride themselves on their thoroughly-researched presentations and collaborations with expert producers, one such expert producer this year being our very own Andy Vessey.
BFI IR35 Conference
The agenda, as shared by BFI, looks to cover off every aspect of IR35 preparation to help businesses continue to use a flexible self-employed workforce with minimal risk. Contractors are a staple in many large-scale business plans as a means of completing specialist or one-off projects without the cost of hiring permanent employees.
BFI’s agenda states that:
‘Organisations must prepare flexible workforce staff and get to grips with tests in order to remain compliant, either inside or outside IR35 rules. You may be putting your organisation at risk if you do not clarify your status and avoid last-minute panic.’
The comprehensive seminar will offer businesses ‘the tools to draw up a compliant and workable game plan for staffing that will avoid fines and ensure talent pools remain at optimum levels.’ It’ll also help to teach businesses the best ways to classify and communicate with affected staff, ensuring they’re aware of their options and obligations as well as offering a range of workable contract options.
All of the above is absolutely crucial for both businesses and contractors to avoid getting caught by the legislation and potentially having to pay both hefty fines and backdated income tax and National Insurance Contributions (NICs) – not a good scenario for either party.
Andy Vessey and Matt Tyler at BFI
BFI’s past clients include the likes of DHL, Telefonica, Tesco, Diesel, KFC, Ikea, British Airways, Siemens and Samsung, so what qualifies the Larsen Howie IR35 team to speak at such an essential business conference?
Andy has been deeply involved with IR35 since its inception in the year 2000 and has personally defended more than 500 IR35 cases, winning almost every single one. Most recently, he successfully represented Jensal Software Ltd at the First-Tier Tax Tribunal in their highly publicised IR35 appeal.
In 1993, Andy qualified with the Association of Taxation Technicians (ATT) and now has 38 years of tax experience under his belt, specialising in employment status matters. He started his tax life at the Inland Revenue (now HMRC) before going on to work for a variety of accountancy practices, and then Qdos Contractor for 17 years. He's now Head of Tax here at Larsen Howie and also runs his own practice, V-Tax Consulting.
Matt Tyler, who’s also gone along for the day, is our IR35 Consultancy Manager. Also ex-Qdos and having worked around the legislation for almost a decade, Matt is responsible for all of our contract and working practices reviews being fully compliant. He also offers comprehensive over-the-phone advice for contractors, helping to guide them through the minefield that is the off-payroll rules. Matt’s helpfully written up some example contract clauses for staying outside IR35 that you can take a look at here.
Why should contractors and businesses be worried about IR35?
From a contractor perspective, if you fail an IR35 test and are found to be ‘inside’ the legislation, you can expect to pay around 25% more in tax every year – amounting to a huge chunk of money absent every month. You also still wouldn’t benefit from employment rights or have a contract of employment with your client, so you could face critical financial issues with no real benefits or protections to speak of. It’s important to take the necessary precautions to avoid this situation.
From a private sector business perspective, it’ll be up to you as of April 2020 to determine your contractors’ employment status. Should you determine them incorrectly as outside IR35 and HMRC finds them inside the legislation, you’ll be liable for a hefty fine and backdated income tax and NICs. This has scared many businesses into blanket determinations (most prolific for this being the BBC and NHS) or culling contractors altogether (see HSBC, Morgan Stanley, and M&G Investments announcements). However, investing in a proper IR35 compliance process allows you to keep the specialised contractors that are crucial to running your business with little risk.
Additional contractor advice
If you’re concerned about IR35, we offer a range of contract reviews with comprehensive advice on how to stay outside the legislation. We also offer IR35 Tax Investigation & Liabilities insurance (TILI), which includes tribunal defence from our resident tax and IR35 expert Andy Vessey ATT as part of the policy. Andy is also available for IR35 training, conferences and specialist commentary on the off-payroll rules. Please get in touch.
You can also read more about IR35 and what you can do to minimise your investigation risk here.