What are the risks for hiring firms and agencies?

Dave Chaplin, CEO of IR35 Shield talks about the risks for hiring firms and agencies.

There are two types of risk. The tax risk, and the resourcing risk.

The tax risk arises where firms continue to hire a contractor on an outside IR35 basis and HMRC potentially challenge the status at a later date. But this risk has been completely blown out of proportion, often by firms who have a vested interest in scaremongering.

The reality is that provided firms have taken reasonable care with their assessments they will very likely have got them right and have minimal risk.

HMRC also have a terrible track record of successfully claiming contractors are “deemed employees”.

This will become even harder once more due diligence is exercised by all parties in the supply chain, and HMRC are unlikely to overturn the will and evidence of the hirer, the agency and the contractor if the matter progressed to a tax tribunal.

To borrow a line from a famous ex President - the only thing firms have to fear, is fear itself.

But, there will be instances where the status is “inside IR35”.

The risk here for firms is that contractors will seek an “outside IR35” contract elsewhere.

“Inside IR35” contract offers will always be at the back of the queue, or they will cost more to fill.

If you need help with your assessment regime then please book a demo of IR35 Shield