Specialising in Temporary Workforce Solutions

Having supported clients to engage Contractor resource across a broad range of industries and sectors for almost a decade, I’ve seen firsthand how challenging this can be for organisations due to the increasingly complex legislation associated with engaging contingent workers. 

Day rate contractors provide businesses with access to additional skills, expertise or capacity on a short-term basis. With it due to become even more expensive to add permanent headcount from April given the increase in NICs, this will become an even more appealing way of supplementing an existing workforce.  

With so many complicated rules that have to be complied with, such as IR35 (off-payroll working rules), Agency Worker Rights, Employment Legislation, The Criminal Finances Act, Anti-Money Laundering, not to mention other industry specific regulatory requirements; you need to be a specialist to be able to decipher them into any kind of compliant, practical operational plan. Let alone the time then required to audit your processes to check whether they are actually being adhered too! 

Take IR35 for example. Historically Contractors themselves had full control over their tax contributions and businesses were able to use Contractors without needing to consider their status for tax purposes. However, when the IR35 tax legislation came into effect for medium and large companies in the private sector in April 2021, the responsibility (and therefore liability) for ensuring Contractors paid the correct rate of tax and national insurance became the obligation of the end users (the businesses).  Many organisations believed that the only way to avoid potential fines relating to non-compliance with the IR35 regulations, aka incorrect IR35 status determinations, was to put very public, blanket bans on the utilisation of temporary workers. The operational impact of this on businesses – and internal teams, was huge.  

Disguised employment – where a worker is engaged as a self-employed contractor or through an intermediary such as a personal service company or umbrella company – but, in reality, operates more like an employee, also often occurs to avoid employment rights and tax obligations. The risks of operating like this are huge, and I have witnessed organisations facing costly Employment Tribunals, HMRC scrutiny and penalties for unpaid tax, NI and employment benefits as a result.   

There are many businesses who continue to utilise Contractors despite their limited knowledge of the applicable legislations, and risks related to non-compliance. 

I understand the complexity of engaging contingent workers, the anxiety it can bring, and the consequences it can have if poorly managed. But I also fully appreciate why businesses still need to access this talent, and the impact it has when a ban is put on this resource due to compliance concerns.  

If you are experiencing similar challenges and need practical, operational advice that allows you to streamline working practices and processes so you can compliantly utilise temporary workers, reducing the risks to your business, please get in touch.