IR35: Are Companies Aware of Supply Chain Risk?

IR35 is now almost upon us, and one of the main complaints we have had from contractors and sub-contractors is that many companies are being slow to review contracts and make status determinations.

The concept of IR35, on paper, should be pretty straight forward to implement. A contractor deemed outside IR35 continues as they are with only some adjustments to the way they set up their own company and tax liabilities, and those deemed inside IR35 receive their net income instead of their gross salary and the employer pays their tax direct to HMRC. In reality, the burden on a principal employer is far greater. The process of reviewing contracts, making determinations, assessing liabilities and then adjusting contractual relationships with individuals or agencies to be compliant has proved quite daunting for many.

The problem has been compounded by many not considering their supply chain and associated liabilities. A huge proportion of the UK’s contract workforce are in technical roles both on and off site and there is a concern that some sectors such as construction, may see project costs rise as a result of IR35, especially in the short term.

The key steps are firstly identifying contractors supplying their services through an intermediary is and completing due diligence on the supply chain. This includes the financial position of the entities in the chain. Secondly, it is essential that status determinations are then communicated to everyone within the contractual supply chain. Supply chain transparency is essential to mitigate risks.

Whatever the outcomes and repercussions, it is clear that end employers should already be knee deep in the review process if they are to meet the looming April deadline for compliance. Whilst HMRC have said there will be a “soft-landing” approach over the next 12 months to those that can prove they are trying to meet requirements, the process of review and assessment needs to be completed as a matter of urgency to avoid any potential disruptions to the labour supply chain.

The preparation process should include the following:
1) Engage with stakeholders. Engage with your contractors, managers and agencies to tell them what you are doing and discuss how you can work together.
2) Conduct an audit Understand who your contingent workers are, how are they engaged, what the contracts look like, how they are paid and what the associated risks are.
3) Create a process. Following a process which allows fair and thorough assessments of workers and safeguards the organisation against any liabilities, with minimal impact to the day to day operations.
4) Implementation. Consistent implementation involving all stakeholders ensuring ‘Reasonable Care’ is demonstrated.

We are able to work with you to help create processes to best protect the business with minimal impact. Carrington West, along with our supply chain partners, have a huge amount of experience of navigating the legislation changes and can help your organisation further understand IR35 and its implications.

One Month to IR35: Top Tips for Private Sector Contractors Looking to Work “Outside” IR35.

By James Fernandes, March 3rd, 2020

IR35 regulations are extending to the private sector in one month, so time is running out for contractors to ensure they are compliant after April 6th 2020. If you consider yourself “outside” IR35 and wish to continue operating so, there a number of measures you can take to help you address the implications of IR35.

1. Conduct a contract review. In other words, get your house in order. Working with your current client(s) to make sure they understand that your services are employed for a specific reason and that they are not seeing you as an extension of their permanent team. This will avoid any misunderstandings and make it more likely that they will treat you accordingly. Ensure that your contracts are accurate and consistent and clearly state the service you are offering and that it is independent of the client’s control.

2. Exercise your right of substitution. HMRC consider this, and personal service, as a key factor in demonstrating IR35 status. If you are able to send a replacement even for a day, you are consolidating your position and enhancing the argument for your “outside” IR35 status determination.

3. Show how you are treated differently to an organisation’s employees. Different pay and benefits are not enough, collectively, factors such as

• flexible working hours
• unpaid holiday and sick pay
• other/multiple clients
• your own equipment
• your own training and development
• a company name that is not your own, with marketing material
• working to a fixed fee for project delivery
These are all indicative of a genuine contractor arrangement. It maybe helpful to produce and maintain a document that details the evidence that you are a genuine contractor and not a disguised employee.

4. Take out business insurance (specifically professional indemnity) if you don’t already have it. This is another factor HMRC look at when considering whether you are genuinely running your own business or not.

5. HMRC’s CEST (Check Employment Status for Tax) tool provides a useful indication of IR35 status. However, it does not guarantee an accurate determination and can give a rather unhelpful ‘undetermined’ outcome. Since its launch the tool has also been criticised for not taking into account Mutuality of Obligation (MOO). MoO refers to the obligation of an employer to provide work and pay for it, together with the obligation of the employee to personally do the work. The lack of any MoO in the relationship between the parties would be a clear indicator of a contract for services rather than a contract of employment, thus the lack of emphasis CEST puts on this when reviewing the IR35 status is problematic.

6. Get expert advice. Recruiters are among many well-versed professionals that can give you clear guidance on how best to approach IR35. At Carrington West, we guided many public sector contractors through the process when it first applied to the public sector a few years ago.

What Does the New Immigration Points System Mean for the UK Built Environment Sector?

Today the government has announced a new points based immigration system for skilled workers wanting to move to the UK. The system, to be introduced in 2021, will require workers to achieve a total of 70 points to be granted a visa. The points can be achieved by having a skill, receiving a job offer at a minimum salary of £25,600 and possessing English language skills. Additional points can be awarded for specific industry sectors where there is a recognised skills shortage and for additional qualifications.

Despite being announced only a few hours ago, concern has already been voiced from organisations representing unskilled workers who will fail to meet the criteria but who, many argue, are needed especially in sectors such as social care. It is clear that there are still many details that need to be ironed out before the scheme is launched early next year. However, it is also clear that employers and recruiters will need to ensure they are prepared for the changes and play their part in ensuring access to the talent supply.

What does this mean for the built environment sector?

Carrington West works with employers across the public and private sectors on highly skilled technical roles as well as manual labourers, all working on planning, design, implementation and maintenance of major UK infrastructure projects. Blayne Cahill, Director of the Highways & Transport division at Carrington West says of the proposed changes,

“There has already been a focus on the skills gap in areas such as engineering. On the face of it, this could be a way of attracting to the UK those skilled and experienced at delivering much needed projects in the most cost-efficient way. Certainly, in this post Brexit era, it could make our role as recruiters easier if we are able to extend our search beyond geographical boundaries to fill those very niche and highly technical roles. However, we mustn’t lose sight of the initiatives that still need to be put into place to secure a homegrown talent pool. Reskilling or upskilling of existing workers has proved very effective. Similarly, a focus on STEM education in schools and colleges, leading onto government and privately-run apprenticeships is another way to future proof the supply of suitably qualified workers in our sector.”

Blayne goes on to say,

“It remains to be seen how the scheme will impact employees looking for lower paid, unskilled workers. The policy statement released today clearly states the aim is to reduce overall migration levels, and asserts that the number of EU citizens that are currently resident in the UK and can apply for the right to remain will be sufficient to cover any short term shortfalls in lower skilled labour. Whether this is the case remains to be seen.”

Today’s news will not be a surprise to many in the built environment sector but will likely be met with concern. The construction industry, in particular, is reliant on EU lower skilled workers. Mark Reynolds, head of the Construction Leadership Council has already said to industry magazine Building,

“the new system is likely to make it harder for the UK construction sector to deliver the homes and infrastructure we so desperately need”.

Whatever challenges lay ahead, everyone in the recruitment supply chain will need to undertake a period of adjustment. As recruiters, our responsibility is to continue to ensure the recruitment industry works transparently and to the highest possible standards to match employers with available talent wherever that talent may be.

IR35 – Recruiters Respond to HMRC Updates

The latest IR35 amends will give HMRC the right to seek unpaid tax and NI from incorrectly categorised contractors from the end-client – if an intermediary agency is unable to pay. Whilst this in theory offers some comfort and protection to agencies concerned mistakes could force financial ruin, some larger recruiters are concerned that small agencies could profit from non-compliance safe in the knowledge the end client is ultimately financially liable.

At Carrington West we have been operating pursuant to IR35 with our public sector clients for some time. Carrington West’s MD, James Fernandes says of the latest amends,

“Non-compliance has never been an option and serves no benefit to us, our contractors or our clients. It is far more likely that the end-clients will look to mitigate any risk of liability by tightening their talent supply chain, ensuring measures are put into place before they use our services. The result will be to force recruiters to supply evidence that they are accurately following the regulations when signing up contractors.”

This certainly seems to have been the case in Carrington West’s experience with public sector clients over the past three years. After an initial period of adjustment, James reflects,

“When IR35 was introduced for public sector contractors in 2017, it was widely reported that there was a mass exodus of contract workers looking for work elsewhere. It was true that many of our risk adverse public sector clients knee jerked by making blanket decisions to not engage contractors at all. However, the potential resultant lack of supply of talent to complete vital infrastructure projects meant for many this was not a sustainable model going forward. What we have seen to some extent, is major organisations switch to a more sustainable individual assessment model.

Perhaps most importantly, processes have been put in place that require assessments to be as accurate and rigorous as possible and contracts are negotiated to ensure that a worker falls outside of IR35 where there is a genuine need for that role to be fulfilled by a contractor.”

Whatever amendments are made over the coming weeks leading up to April 2020, IR35 is here to stay. Carrington West’s experience in the public sector has placed us in the unique position of already having the expertise and capabilities to guide contractors and clients through the changes and build a robust framework that mitigates risk whilst maximises access to much needed talent in the built environment sector.

James concludes by noting,

“Any recruiter that puts their head in the sand over IR35 is being very short sighted. The temporary and contract work force in all sectors in increasing as many people chose to work in more flexible or varied roles. By not being on board with IR35 or any future regulations that are bound to be introduced, recruiters will find themselves outside of the supply chain.”

Carrington West are thrilled to announce we have won “Best Company To Work For (Up To 150 Employees)” in the prestigious Institute of Recruitment Professionals (IRP) Awards 2019.

The IRP awards celebrate professional excellence and the inspirational work carried out by the recruitment industry’s brightest stars. In all, ninety-three outstanding individuals and businesses were shortlisted across eighteen different categories such as newcomer of the year and best company to work for. Congratulations to two of our award nominated consultants – Krishan Adams & Ilya Donets MSc GIS for all of their continuous hard work over the years. Also congratulations to our award nominated Back Office Team – Elise Sherwin, Abby Bissett, Lucy Rimmer – Assoc CIPD, Ella Razzell, Lauren Rose, Chloe Revy and Grace Wearn for all of their hard work behind the scenes for the business. Lastly, we’d like to thank all of our staff, clients and candidates for all of your continued support over the years and forthcoming. We are all truly humbled. Thank you – All at Carrington West. 

Solent 250 Listing – Carrington West

We are proud to announce that Carrington West have once again been featured in the latest Solent 250 Listing!

 

Simon Gardiner, Director said, “we are delighted to once again be included in the Solent 250, It gives us an opportunity to continue to learn and develop by rubbing shoulders with some of the largest and most prestigious companies in our region. It certainly gives everyone here a great sense of pride to see how far we have come from our humble beginnings only a few short years ago. We put our two customers, the client and the candidate at the very centre of everything we do, and this has allowed us to growth rapidly whilst maintaining our quality of service”.

 

Business Magazine’s Solent 250 celebrates the top private independent companies in the region by turnover. The prestigious listing acts as a barometer of the region’s economic performance. The 250 companies contribute significantly to the UK’s GDP – and many are the leading players globally in their sector.

New Offices!!

“The UK’s Best Recruitment Company to Work For” is Expanding … 3 New Office Locations!

Carrington West are an award-winning recruitment agency specialising within the Built Environment sector covering Water, Buildings, Utilities, Town Planning, Highways and Rail.

Currently with a record number of temporary contractors across the Public and Private sectors and the most permanent placements made to date we are now looking to increase our headcount from 55 to over 75 in the next 12 months alone.

As a result of this continued growth Carrington West are pleased to announce the opening of 3 further offices across the UK in order to partner our clients more closely within our specialist areas. As such we now have our Head Office in Portsmouth followed by three further offices in Manchester, Birmingham and London.

If any clients within the Built Environment sector working in these locations are looking for a specialist recruitment agency, please do contact us on our office numbers below to discuss your requirements:

Head Office – Lakeside 1000, North Harbour, Western Rd, Portsmouth, PO6 3EN Tel: 02393 876 000

London Office – 5 Chancery Lane, London, WC2A 1LG Tel: 0207 406 7582

Manchester Office – 76 King Street, Manchester, M2 4NH Tel: 0161 817 5023

Birmingham Office – The Colmore Building, 20 Colmore Circus, Queensway, Birmingham B4 6AT Tel: 0121 262 4156

Scottish Water completes beach pipe project

Scottish Water has completed a £500,000 scheme to help improve the local wastewater network and protect the natural environment at Limekilns beach, near the Firth of Forth.

The work involved replacing a 265-metre long cast iron outfall pipe on Limekilns beach along with building 45 new concrete supports to hold it above the seabed.

All the piping was covered with an extra durable weather-proof wrap given its location.

Work began in June and the project has now finished two weeks ahead of schedule.

The work was delivered by partners amey Black & Veatch (aBV) during summer to protect winter wading birds.

Scott Fraser, regional communities manager at Scottish Water, said: “This essential work was carried out to upgrade the old wastewater pipe at Limekilns which was of an age it had to be replaced.

“While most of the work took place on the beach we have had some traffic management and a cabin on site and we thank the people of Limekilns for their patience while we were in the area.”

While at the site, the project team from aBV helped members of Limekilns and Charlestown Floral Display Group repair flower displays at the village’s pier, which were totally destroyed after an oil spill at the beach earlier in the year.

Fiona Philp, a volunteer of the group, said: “The team helped in a number of ways including laying gravel and pebbles, lifting out tree stumps, planted bushes and helping transport sea cobbles from Charlestown.

“They really helped our wee village come back from an environmental disaster, their help was invaluable and they were absolute gems.”

She said judges from Beautiful Fife were “very impressed” with the new floral arrangements which they came to judge last month and are hopeful the village could win an award this year.

The team at aBV also donated £200 to the Charleston Floral Display Group to be used to pay for winter flowering bulbs and new flower pots. It will also donate £300 to the Limekilns to Charlestown & Pattiesmuir Gala group.

Charlestown, Limekilns and Pattiesmuir Community Council also praised the team’s work. Secretary Martin Callanan said: “Everyone was impressed with the hard work, provision of information, and tidiness of the works. The extra work on the flower beds was highly appreciated.”

https://wwtonline.co.uk/news/scottish-water-completes-beach-pipe-project

Network Rail awards final west London station upgrade contracts for Crossrail

Network Rail has awarded the final contracts for upgrades to stations in west London as part of the delayed flagship Crossrail project.

The upgraded stations will benefit from improved passenger flow, new ticket halls and enhanced accessibility with lifts and footbridges, as well as step free access in order to prepare the stations for a boost in passenger numbers when Crossrail fully opens.

Work at West Drayton, Hayes & Harlington and Southall will be carried out by Hochtief whilst Graham will undertake the work at Acton Main Line, West Ealing and Ealing Broadway.

 

Mark Wild, Crossrail’s chief executive, said: “London needs the Elizabeth Line completed as quickly as possible and brought into service for passengers.

“It is very encouraging that Network Rail are now able to award these remaining station contracts which form an important part of their remaining work on the Crossrail project.

“These station upgrades are vital to supporting the increased numbers of passengers who will use these stations once the Elizabeth Line is fully open.”

Network Rail delivered the enabling works for the new station buildings by installing the foundations and steel frames last year, and the new ticket halls and step free access will be completed by December 2020.

Crisis-hit Crossrail, which was originally due to open in 2018, has been hit by a number of delays and bailouts, but last month its bosses revealed that the Elizabeth Line would be open by March 2021 at the latest.

Network Rail’s project director Dave Corkett said the upgrades will be an important element of its work on the Crossrail project, and said the contract will allow it and the new contractors to “deliver these important station upgrades that are so eagerly awaited by local communities in west London.”

Lawrence Jackson, managing director of Hochtief, said it was looking forward to delivering the upgrade works with minimal disruption, whilst Graham rail director Jonny Kerr said it was “delighted to be appointed to this nationally important infrastructure project.”

For more articles like this, please visit Rail Technology Magazine.

Ringway replaced by Kier on £210m contract