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Benefits of Payroll Services for IR35
Our Payroll Service has been established for over 15 years and is utilised by numerous customers to bring efficiency, compliance and visibility over their payrolled/direct contractors.
We have seen a recent increase in demand for these services due to clients preparing for IR35 regulatory changes in April 2021. If you are currently payrolling contractors directly, you may be at risk of falling foul of the IR35 reforms.
What are the risks of payrolling directly?
Engaging & payrolling contractors directly means that you will be both the ‘engager’ and ‘fee payer’ in relation to IR35, so will take-on all of the potential associated risks, including assessing contractors and making appropriate deductions.
Additionally, there is also a risk that directly-engaged contractors could be found to be employees and acquire associated rights, such as the right to redundancy payments and unfair dismissal rights.
Introducing Gattaca as a payroll partner creates a contractual ‘buffer’ and makes it less likely that contractors will be assessed as being your employees.
How can a payroll solution help you in the run-up to IR35 reforms?
- To provide a contractual ‘buffer’ meaning that you are not the ‘fee payer’ in relation to IR35
- To provide visibility of the contractor workforce
- To ensure compliance of the contractor workforce
- To receive support with future risks/legislative changes associated to the contractor workforce
- To provide cost control in relation to physical contractor pay rates
What would a payroll service include?
Centralised management: A single point of contact for all direct/payroll contractors. Support for hiring managers in all aspects on utilising payroll contractors.
Governance: Ongoing assurance that all contractors have the right to work in the UK and are paying appropriate tax. Regular audits of contractor documentation.
Protection: We have robust practices to ensure that all limited company contractors have insurance cover.
Cost control: Insight tells us that the pay rate to a payroll/direct contractor is usually 14-25% above those of their counterparts found via a rate controlled path.
Best-in-class technology (subject to volumes and requirements): Efficient process management for on-boarding, extending and exiting payroll / direct contractors. Real time, self-service data regarding this population. Online, mobile-enabled time-sheeting (which can be split by project codes) and quick implementation (weeks not months).
How would your contractors benefit?
- Guaranteed regular pay (weekly, 30 days in arrears from their invoice)
- Discounted insurance policies (if utilising Gattaca preferred providers)
- Access to compliant and effective umbrella companies
- First priority access to alternate assignments when their contract expires
- Dedicated contractor support team to respond to their needs
What about contingent worker sourcing & recruitment?
If your business would benefit from a Payroll Service, it is also worth considering if a Managed Service Programme would offer even greater value to your business.
A Managed Service Programme incorporates all of the elements of a Payroll Service, but also includes the compliant supply chain management and sourcing, of your flexible workforce, including a greater focus on hiring manager and candidate experience.
Interested in finding out more about Payroll Services?
Arrange a short meeting with one of our IR35 experts today to discuss our Payroll Services for IR35, or head over to our IR35 hub for more information about the forthcoming reforms.