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IR35 Guidance

IR35 Guidance

IR35 Guidance

15 Jun 2017

At the Schools HR briefing on 10th May, schools in attendance requested more guidance about the implications of IR35.  The legislation became effective from 6th April 2017 and applies to all public sector bodies, including schools.  It is recognised that the HMRC guidance is complex and in some parts unclear, however we can only provide guidance in line with the current HMRC requirements.  This guidance is set out below:   

  • In the fist instance, schools are advised to look at the HMRC website to familiarise themselves with the IR35 legislation and questions within the assessment tool.
  • The main (agency) Workers affected by IR35 are Ltd companies, Personal Service Companies (PSCs) and sole traders.
  • It is the responsibility of School to determine whether the role in which the agency worker is engaged is within or out of scope of the IR35 regulations.
  • It is not the worker or the agency who determines the IR35 status of the worker and whether worker is in or out of scope.
  • Schools should complete the HMRC online assessment tool to determine the status of each role. HMRC link to the tool - https://www.tax.service.gov.uk/check-employment-status-for-tax/setup
  • The worker can complete the tool to determine their status; however the school will need to confirm that it is in agreement with the responses that the worker has provided in order to reach a conclusion.
  • If a worker insists that their role falls outside of IR35, the tool should be completed and the answers agreed between the worker and the school.
  • In general, if it is the case that the worker is engaged in a role that is part of the school’s establishment/structure it is more likely that the role will fall within the scope of IR35, which means that they will be subject to payment of tax and NI and the school will have responsibility to ensure that these payments are deducted.
  • If the worker is engaged via an agency, then the worker’s agency can do this through an umbrella company (payroll) arrangement.The school will need to request confirmation from the agency that deductions are being made.
  • If the worker is engaged to deliver a key project with clear milestones and deliverables, it is possible that the role may fall outside of IR35 – but again the tool will need to be completed to confirm.
  • When engaging to future roles the school should complete the HMRC assessment tool and inform the agency/worker whether the role falls within or outside of IR35.

Please contact your HR Business Advisor if you have any queries about this guidance.  Alternatively, you may contact Cynthia Walters, HR Strategic Lead – 0207 974 4919 or Cynthia.walters@camden.gov.uk


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