AWR reveals the true cost of IR35

AWR reveals the true cost of IR35

The Agency Workers Regulations that come in to force on 1st October 2011 allow recruiters and employers to quantify, for the first time, the real cost of IR35.

Whilst the Regulations have steered away from direct comparisons to IR35; preferring instead to rely on the broader definition of ‘being in business on your own account’ it has already become widely accepted that assignments outside IR35 are likely to be considered as outside the scope of the AWR.

The direct result of this is that for the first time, since the introduction of IR35 over 10 years ago, there is now a real and quantifiable cost, or saving, that can result by accurately establishing the status of the assignment.

If a hirer was looking to engage a worker, after the Regulations come in to effect, the cost of being in IR35 adds around 20% to the rate.

This difference is likely to provide enough encouragement, and motivation, for hirers to get to grips with IR35 and ensure, where appropriate, relationships become aligned.

Professional Passport is offering both training and support services to assist recruiters with this; including a unique service where HMRC will formally confirm the IR35 status of an assignment.

What is essential, in a world post AWR, is to ensure that the terms of all assignments accurately reflect the reality; this reduces risks for all parties.

More information and full explanations of all the options available can be found in The Professional Passport Recruiters Guide to The AWR, you can register for a copy here www.professionalpassport.com/agencies/740