IR35 for Agencies: Finding the Best Employer/Umbrella

IR35 for Agencies: Finding the Best Employer/Umbrella

Jan 28, 2021

In these difficult times of Brexit and repeated Covid-19 lockdowns there are greater financial risks in the contracting chain than ever before.

Under the new IR35 legislation HMRC can also now seek to recover monies from other parties within the contracting supply chain where they are unable to recover tax/NI from another party in the contracting chain.

It is vital that you choose to work with businesses up and down the contracting chain that do not bring additional financial risks to your business, particularly in these difficult times for everyone.

Crest Plus is financially strong in its own right but is additionally part of the second largest group in the UK within our sector. In these risky times you should consider minimising your own financial risks by working with financially strong partners who will not fail during the sadly inevitable difficult times ahead. We recommend you should always seek independent evidence of financial strength rather than just taking the word of your suppliers and customers. As we have been trading profitably for over 20 years and have a strong balance sheet, your payments are safe with Crest Plus as your specialist Umbrella company partner.

When deciding how to help minimise the financial impact on your freelancers and contractors caught inside IR35 you should consider the following factors:

  1. Is there a way to change working practices or contracts to keep workers outside IR35?
  2. If not, then what are the contracting options available?

A) Umbrella

B)Agency or hirer’s own PAYE

C) Self-employment/CIS

Where deciding on employment and contracting options available the following factors need to be considered:

  • Can the umbrella support our business with the all the contracting options we prefer? For example within construction, genuine expertise is vital if you wish to consider accepting CIS options. Recruitment businesses have regularly lost their CIS gross status due to bad advice from umbrella companies “playing” in this sector.
  • Can the umbrella support us with IR35 determination assessments advice?
  • Can the umbrella evidence independently audited compliance? Many hirers and recruiters now insist on FCSA membership as poor compliance within your umbrella company can now more than ever cost the recruitment business.
  • Is my umbrella company partner financially strong enough to navigate the difficult period ahead? Do your own checks – many umbrella companies have unaudited accounts or have very weak balance sheets. This can evidence big risks for your own business.
  • How many contractors do they pay – a good sales pitch and website may gloss over inexperience and lack of people in the back office. One of our clients recently commented that they “would not rely on small businesses to pay our workers during a pandemic as unfortunately there is inadequate back up if staff are not in work”.
  • Does the umbrella employ genuine experts full time within the business e.g. Chartered Accountants? Many sell their own expertise but they don’t genuinely have it. This can lead to incorrect advice and trouble in the future.
  • What additional benefits do they give their umbrella employees? Do they provide free personal accident and commute insurance covers, do they provide free retail shopping discounts and mental health and lifestyle support for the umbrella workers? Such additional benefits can represent big savings for workers.
  • Look for evidence of professionalism and training – do they have Investors In People or ISO Awards? Lack of training of umbrella back office staff can cause reputational problems for your business.
  • Do the umbrella’s own culture evidence care and going the extra mile – look for evidence of supporting charities, and seek references from others

Crest Plus have worked hard over many years to position ourselves to uniquely be able to tick all the above boxes.

Contact us now on 01244 684700 if you want to join the many recruitment businesses adding Crest Plus to their PSL to take advantage of all the above benefits and help your business safely navigate the impending changes arising from IR35 reform, Brexit and Covid19.

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