FINANCE
Off-payroll private sector reforms: how to prepare
Initially introduced across the public sector in 2017, changes to the IR35 rules on personal services and self-employment in the private sector will come into effect in April 2020. Accountancy firm Newby Castleman explains what these changes will mean and how businesses can best ready themselves in the year ahead.
The Government estimates that fewer than ten per cent of Personal Services Companies (PSCs) obliged to comply with IR35 legislation actually do so, resulting in a cost to the Exchequer of more than £1bn in unpaid taxes and National Insurance (NI). This non-compliance led to the introduction two years ago of public sector reforms, which will also be applied to the medium and large businesses in the private sector from April next year. The significance of this private sector extension is that responsibility for
determining the off-payroll worker’s employment status and deciding whether the IR35 rules apply will now fall with the business as the end user, rather than with the worker’s PSC as it currently does. It will be down to the end user to make PAYE and National Insurance deductions on payments to workers, including those made through an intermediary such as a PSC, and to pay their NI contributions. From April 2020, medium and large businesses will be required to provide off-payroll workers or their intermediaries with a status declaration
John Griffin
at the start of their contract. It is important to note that small businesses – those with an annual turnover of under £10.2m, a balance sheet total of under £5.1m and fewer than 50 employees – will not be affected by the reforms. The draft Finance Bill legislation is due to be published this summer. John Griffin, Partner at Newby Castleman, said: “Businesses should not
underestimate the time and work necessary to prepare for the new IR35 reforms. Determining the employment status of off-payroll workers, calculating the potential costs of applying PAYE and NI deductions and contributions and anticipating the all-round impact of these changes could require up to 12 months of preparation. “We would therefore advise any businesses which may be affected to begin organising themselves now in preparation for next April’s reforms.”
Nottingham insurance intermediary solving problems for brokers across the country
Since opening its doors to insurance brokers seeking specialist property insurance in 1998, Nottingham-based Vasek Insurance has combined new technologies within the sector with its traditional values to strengthen relationships. The majority of insurers work
through platforms, meaning brokers can often find the products they need for their customers online. However, these platforms don’t always provide the most suitable results when placing a more complex risk. Vasek’s flexible approach was
picked up on by ITN Productions and the British Insurance Brokers’ Association (BIBA), which interviewed the team for its Leading the Way programme. “Vasek solves problems,” said
Paul Hartle, Joint Managing Director of Coversure Insurance in Nottingham.
82 business network July/August 2019 Around a third of Paul’s business
is property-related, so he often receives enquiries for non-standard requirements. He added: “A lot of insurance
companies don’t want to solve those problems for us. Vasek does.” One of Vasek’s account
executives, Craig Hart, believes it’s essential that members of the firm’s underwriting team get “personally involved” with quotes and policies, in order to assess a risk from a client’s or broker’s point of view. By aligning modern technologies
with these traditional values of trust and excellence, Vasek has strengthened relationships with brokers across the country. In fact, its team of business development managers regularly leave the East Midlands to visit intermediaries around the UK, to inform them of the new services on offer. This customer-focused approach is
fundamental to Vasek’s company ethos, which has been consistently recognised for its success by the insurance industry. Since 2011, Vasek has been awarded 5 Star Defaqto ratings across its range of specialist property insurance. Vasek’s involvement in the
Leading the Way programme was
broadcast at the annual BIBA Conference in Manchester in May. The programme features key industry interviews and news-style reports, along with sponsored editorial profiles. National newsreader Natasha
Kaplinsky introduced Vasek in the programme.
National newsreader Natasha Kaplinksy
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