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IR35: Project management and contractor services under the new rules

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Posted by
Michael Cleavely
Published
June 20th, 2023
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Since April 2021, we've helped project managers team up with their colleagues in HR and procurement to ensure that they determine the employment status of all of their contractors correctly. We've also helped clients keep as many contracts outside IR35 as possible whilst remaining fully compliant. By doing this, you can be sure that your project will be finished on time and within budget.

Why project managers struggle with IR35

Project managers CoComply's team work with have told us that the following issues present the biggest problems.

  • You've never had to deal with IR35 before. You have never been trained on IR35 and you don't have ready access to professional advice on the matter.

  • Lack of internal knowledge about IR35. Your colleagues in the business rarely have experience in applying IR35 to individual roles. Your colleagues in procurement, when you ask them a question, refer you to HR.

  • You don't know how to determine what "disguised employment" is. IR35 is the most complex part of current UK employment legislation. Deciding whether a contract is inside or outside IR35 is, in many cases, beyond your current ability level.

  • You don't trust online assessment tools. There are too many risks in using tools like HMRC's CEST tool and those offered by private sector companies if the information is entered incorrectly.

  • You don't know how to manage projects compliantly outside IR35. HRMC also assess IR35 status by a contractor's working conditions on a project as much as what is in their contracts. You're unsure about how much direction or training you can give them if they are outside IR35.

  • You're not clear if a contractor can use your company assets. You don't know how a contractor using your company's equipment and infrastructure affects their IR35 status.

  • You're not sure about hybrid working and its effect on IR35 status. The pandemic changed how many employees and contractors work. You're uncertain about whether a contractor working on a project from home or not could change their IR35 status.

  • There's little specific online information. If you do run a search "Project Manager IR35" online, there are next to no articles or guides on the subject.

IR35 may be causing you these problems as a project manager

Project managers shared the following with us as their main challenges with the new rules on IR35:

  • Your company may be fined for not engaging correctly with contractors from April 2021. You're not certain which services have been provided by contractors using personal service companies since the law change. If discovered, this will result in a fine.

  • Contractors you've worked with don't want to become employees. Contractors do not want to pay income tax and National Insurance contributions at the same level as employees.

  • You're having trouble getting the talent you need on inside IR35 roles. This is because they don't want to see their take-home pay dimished through deductions for tax. This is something affecting all sectors because, at the same time, many professionals have left contracting for good because of the IR35 change.

  • You have trouble keeping within project budgets. Increased labour costs like Employers NI coupled with fast-rising contractor day rates make staying with a project budget hard.

How can CoComply project managers

Blanket bans on outside IR35 roles are not the answer for project management exercises. Don't worry if you work for an agile organisation - that's one of CoComply's specialities.

You can use part of your project budget to hire us so that you can attract the talent you need to get the job done and stay within IR35, assuming you have permission to do so.

Here's a list of our services for project management teams so they can take back control:

  • We're here to help. We're here during office hours to answer all IR35-related questions and help you manage IR35-related tasks. You have a team of IR35 experts at hand backed by experienced employment law solicitors.

  • We can explain what we do to other departments. If you need to explain to colleagues the service we offer or send further information, please let us know.

  • Know how to manage contractors compliantly. You must manage contractors in a particular way to ensure ongoing compliance. We'll let you know what you should and shouldn't do.

  • You can ask us to liaise with supply chain partners. Many client use recruitment agencies and we can work with them on your behalf.

  • Know IR35 status before you engage contractors. When you have identified an engagement that requires an external resource, tell us and we can let you know its IR35 status before you start working with a contractor.

  • Help to tweak IR35 status if required. This is not always possible but the contracts and working conditions on many roles can be adapted to safely take the role "outside IR35".

  • Monthly contractor compliance check-in. We track and check progress with each contractor every month to ensure that their working conditions are consistent with their IR35 status.

  • Six-monthly status reassessments. On longer projects, we review and reassess contractor status determinations. This is an ideal time to make any changes required to reflect the progress on your project.

  • "IR35 attention required" alerts. We'll let you know straight away if there's a potential IR35 issue with a contractor when we've spoken to them and let you know what you need to do to rectify it.

  • Online document repository. We store all documentation, correspondence and files relating to IR35 engagement over the life of the project. This protects you against contractor status appeals and HMRC investigations.

  • Online training resource. Access our web-based training courses and regular webinars.

How working with us help you be a better project manager

Clients in project manager roles have the following benefits:

  • An IR35 expert on call. Clarity on all questions you have and actions you're considering taking.

  • Certainty on each contractor's actual IR35 status. We provide you with the reasons we have come to a particular decision.

  • Compliance from project start to end. Feel confident in the fact that you've got IR35 right at all stages.

  • Get back time to project-manage. IR35 management takes a lot of time - let us do it for you.

  • Don't worry about IR35 anymore. Many clients we deal with, whether in project management, HR or procurement, worry about IR35 because of the financial risk. You don't need to be concerned anymore.

  • Lower project costs. By identifying outside IR35 contractor roles, save 18.05% on Employers NI and, if applicable, the Apprenticeship Levy.

  • Get the best talent working on the job. Be one of the few companies to offer flexibility by examining IR35 status on a case-by-case business.

  • Paperwork in order for review by others. All paperwork related to IR35 is safely stored and available for inspection by permitted users in your business.

And, whether your project is one month long or three years long, you can be assured of:

  • We've done this before in other companies. We've helped all sizes of clients from independent education providers to global pharma firms.

  • A flat fee per contractor per month. All our services at one fixed price per month with volume discounts available

  • No long-term contracts to sign. We only offer 30-day rolling contracts to clients.

CoComply for project managers

There's plenty of other work you could be doing as a project manager than IR35. But IR35 is now a reality and you need to handle it to attract the top talent to your project and stay within budget.

Tell us about your project and the people you'll need for your team. Call CoComply on 0203 051 9792, email us at hello@cocomply.co.uk or fill in the form on this page.

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Michael Cleavely
Managing Director at CoComply

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