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Off payroll worker risk diagnostic
Risk Diagnostic Service
Following the transition to the new off payroll worker rules applying in the private sector from 6 April 2021 this short note presents our off payroll worker risk diagnostic service. The service would be beneficial for organisations that require an objective risk-based assessment across their off payroll worker governance arrangements, which are now operating in a post April 2021 ‘business as usual’ environment. Our goal is to support stakeholders responsible for meeting the core tax and legal compliance requirements and, importantly, for ensuring any new governance introduced will stand the test of time.
The aim of the risk assessment diagnostic is to provide responsible stakeholders with a risk-based overview of an organisation’s off payroll worker governance focusing on a number of key pillars influencing tax and legal compliance and is measured using our ‘what does good look like’ benchmarking framework.
We anticipate the diagnostic would be valuable for project sponsors/leads, and project teams more broadly, but also on a go forward basis for stakeholders holding a relationship with HMRC and for whom there will be a likely requirement to present an organisation’s approach to off payroll worker at any future Employer Compliance or Business Risk Reviews. The diagnostic is relevant for organisations who are continuing to use PSCs after 6 April 2021 and to those who have chosen not to use PSCs but will need to demonstrate that all ‘in scope’ arrangements have been identified and transitioned appropriately, removing any ongoing risk.
Our scope of work is flexible and can either be delivered as a complete package across all four of the pillars discussed below, or, if preferable, as individual components. We can also offer participation in a workshop or workshops to examine the four pillars of compliance responsibilities.
- PSC Identification: leveraging our IR35 PSC identification technology, an assessment of whether all PSCs have been identified and the steps taken in respect of directly engaged, agency and other service provider relationships
- Employment Status assessment: an assessment of the approach to evaluating ‘in scope’ arrangements including:
- the IR35 gateway – evaluation of fully-contracted out services versus personal service in respect of service provider relationships
- the suitability of role based versus individual assessments
- the status assessment methodology used
- complex and ‘undetermined’ or ‘qualified’ cases
- Contractual updates: a tax and legal review of updates to contractual documentation to ensure they adequately reflect the change in law and obligations of both parties based on organisational strategy
- Operating in BAU: an assessment of an organisation’s off-payroll worker operational approach including:
- for ‘in scope’ off-payroll IR35 engagements - a review of information exchanges in order to meet statutory requirements
- for ‘out of scope’ off-payroll IR35 engagements – an assessment of the approach taken to alternative engagement models used, i.e. use of agencies, umbrella companies or alternative PAYE employment arrangements.
A risk diagnostic report across the four pillars assessing effectiveness of IR35 governance across those areas with comments on areas of strength and where improvements could be made.
Please do get in touch with any of the contacts listed below to discuss this further.