A North East recruitment firm is helping employers safeguard themselves against prosecution following changes to tax avoidance rules.
Baxter Personnel, which has branches in Darlington, Thirsk and Middlesbrough, along with London and Cardiff, is hosting a webinar later this month to stop firms falling foul of the Criminal Finances Act and the upcoming changes to off-payroll rules.
The IR35 reforms, due to be implemented later this year, strengthen changes made by the Criminal Finances Act and mean that companies will now be criminally liable if tax evasion is taking place anywhere in their labour supply chains – leaving them open to prosecution.
As such, employers are being urged to ensure that they have taken the necessary action to prevent the facilitation of tax avoidance.
On April 6, HMRC plans to introduce changes to IR35, a part of the act designed to close a loophole allowing contract workers to channel work through their own limited company to pay less tax.
Andrew Harrow, Managing Director of Baxter Personnel, said: “The reforms make it more likely that, if someone within a supply chain is evading tax, businesses will be left to face the consequences of their supplier’s actions. Our webinar will discuss the steps companies can take to safeguard their businesses.
“Employers are expected to take ‘reasonable prevention procedures’ to ensure that their workers are not evading tax, and they can be held criminally liable if such procedures are not in place.
“In my 17 years in the recruitment sector, I have witnessed an amazing number of changes, but nothing like the impact of IR35 being rolled out to the private sector.
“It is a complex piece of legislation, and we want to do all we can to support employers to make sure they’re upholding the law when it comes to tax.”
Speakers at the webinar include Alasdair Ross, Chief Executive at human resources firm WeDo HR, and Paul Clark, Partner and Head of Employment Law at Jacksons Law Firm.
Alasdair said: “From a human resources perspective, it is important to understand how this change affects the employment status of consultants and ensure that all HR checks and protections are in place.
“The change moves the responsibility of proving employment status from the contractor to the employer, which requires a greater understanding of the gravity of the new legislation.”
Paul said: “Adopting a blanket approach to IR35 risks reaching the wrong conclusions, which could lead to tax arrears or unnecessary deductions from payments for services. As this could potentially damage working relationships, I hope to give attendees an insight into how IR35 affects them, and what they can do to avoid this damage occurring.”
Businesses using recruitment agencies are particularly at risk from the changes; should the agency supplying staff be non-compliant, the employer will be liable for prosecution.
Andrew added: “At Baxter Personnel, we have operated an in-house PAYE payroll system for the last 30 years, and have never outsourced or paid anyone outside the PAYE model.
“As such, we know how to be PAYE-compliant and we know where to look and what to look for in payroll processes that are not.
“To share our decades of experience, not only are we hosting this webinar, we are also offering free telephone advice for any businesses unsure of their responsibilities.”
The session will be held via Zoom at 2pm on Thursday, February 25th. To book your place visit www.baxterpersonnel.online