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IR35 – Journey to April 2021 technology solutions

Organisations with a significant number of contractors operating via PSCs should consider how their preparation ahead of 6 April 2021 and their future operating models can be enhanced by utilising automation. Deloitte has built a technology solution to help identify the PSCs you engage efficiently, and a workflow management tool to support you with introducing IR35 processes into your “business as usual” on-boarding/resourcing landscape.

PSC identification

One of the key initial steps for any organisation’s IR35 preparations is to identify the PSCs it engages. This can apply to:

  • Organisations which have not yet identified all PSCs in preparation for 6 April 2021 (including those which had identified PSC engagements ahead of 6 April 2020 up to a ‘cut off’ point, but where further PSCs could have since been engaged); and
  • Organisations which plan to continue to use PSCs on or after 6 April 2021 and are determining how to go on to identify PSCs as part of their on-boarding process as “business as usual”, once the full IR35 reform has taken effect from 6 April 2021.

PSCs can be present in an engagement supply chain in a number of forms, including those directly engaged and paid by Accounts Payable (AP), and those engaged via intermediaries, such as agencies or other service providers. Identification may be supported by existing flags within AP systems to identify these entities, but our experience suggests that even where this functionality does exist, it should be supplemented by a wider review, confirming how this operates in practice. 

Deloitte has developed an automated methodology (our PSC Identifier Tool) to risk assess potential PSCs from large vendor supplier lists. A variety of organisations successfully utilised this methodology in their preparations for 6 April 2020, and are now turning to consider how to continue to identify PSCs going forward as part of their “business as usual” processes. Our short video comments more specifically on how automation might help you with PSC identification. This video is relevant for all organisations which expect to perform some form of review of their vendor data, either as a starting point for IR35 preparations, or to validate or continue any identification work already undertaken.

IR35 Workflow tool

For organisations which will need to introduce an IR35 process into their on-boarding/resourcing landscape, IR35 Workflow is a standalone tool which can be implemented quickly and can support with:

  • delivering a framework for a consistent IR35 assessment process and for efficient communication between on-boarding personnel, hiring managers, contractors and agencies/other third parties
  • enabling IR35 compliance steps to be met, including making a status determination statement (SDS), issuing the SDS as required and facilitating and managing any appeals against the SDS
  • delivering automated template communications and outcome messaging
  • providing a repository to hold details of pre-assessed roles and supporting reasoning so that new hires can be matched to those roles where appropriate
  • maintaining robust audit trails of all IR35 decisions made as part of overall strong governance procedures

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