- 12 Feb
IR35 Changes Will Affect The Recruitment Sector
Recruiters are commonly users of invoice finance, so we keep abreast of changes that will affect the sector.
There are some changes planned to IR35 by HMRC (formerly known as the Inland Revenue from which the "IR" was derived), from 6th April 2021 (originally planned for 2020, this was extended by a year due to the Government's coronavirus measures), that need to be understood by recruitment companies. All staff agencies need to check these tax changes, and ensure that they remain fully compliant with the new rules - otherwise they could become liable for any additional taxes and penalties.
IR35 Changes And Recruitment
IR35 is a set of off-payroll working rules that affect clients, workers and their intermediaries. The rules apply if a worker provides their services to a client through an intermediary, but would be classed as an employee if they were contracted directly.
The Government's website explains the changes to IR35, and we also saw this helpful video from our friends at TBOS (Total Back Office Solutions) who are giving their staff agency clients, as much help and support as they can, to help them ensure that they remain fully compliant with IR35:
Recruitment Invoice Finance & Payroll Solutions
If you are a recruitment company that needs help with your payroll management, or invoice finance to release the cash tied up on unpaid invoices, we can also introduce you to the wide variety of providers that are able to provide specialist help businesses to your sector.
The use of invoice funding by recruiters is approximately 20 times higher than the overall average, because these services can be so useful to staff agencies. It means that you don't have to wait for your customers to pay before you get the cash to pay your contractors. This can have a significant cash flow benefit to your company - smoothing out the peaks and troughs.
PLEASE NOTE: FundInvoice are unable to take any responsibility for the correctness and accuracy of any information found on websites that we link to, you should seek advice from an accountant regarding all tax related issues.