Blanket IR35 Assessments Are No Longer Recommended
- Date: Monday 20th May 2019
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You may recall that 2018 saw the launch of an investigation into contractor management at Network Rail and the results are staggering: 810 out of 817 contractors were re-categorised following their IR35 assessments and were forced to pay income tax and national insurance. However, this categorisation only applies for tax purposes – not all contractors will be entitled to sick pay, holiday pay or pensions.
In a strange turn of events, it has now emerged that Network Rail protocol of blanket-processing of contractor assessments was actually developed in collaboration with the HMRC in the first place!
A spokesperson has now issued a statement, raising concerns that contractors across all industries may have been wrongfully categorised as employed or vice versa.
The recommendation is therefore to assess each case individually. Where larger organisations work with a number of contractors, off-payroll working should be scrutinised for each project rather than establishing a blanket status for the contractor.
You can find out if a contractor should be classed as an employee by using the Gov.uk link provided: https://www.gov.uk/guidance/check-employment-status-for-tax.
Do bear in mind that from an employment law perspective rules may vary, depending on the potential worker status of the individual(s).
Source: Manuela Grossmann