EZHR WEEKLY UPDATE 5th AUGUST 2022

Hot on the heels of the governments update on employee status, HMRC have announced that they believe that businesses have underpaid employee National Insurance Contribution to the tune of £1.4 billion.

The tax processes, referred to as IR35, was amended identify contractors and PSCs and prevent businesses from using limited business or self-employed basis to 'disguise' their true employment status.

HMRC is now cracking down on how the private sector organisations classify their employees. The clarification of the calculation of hours for minimum wage is putting the onus on employers to get it right

It’s important to remember that IR35 doesn’t apply to everyone, if you’re a small business and you satisfy at least two of the following tests IR35 doesn’t apply:

• It has an annual turnover not exceeding £10.2m

• It has a balance sheet total not more than £5.1m

• It had an average of no more than 50 employees for the company’s financial year.

Also, if you’re owned by a larger group company you may be captured through the total numbers for the group. It’s worth double checking.

Remember, the obligation to test the nature of the relationship sits with employers – whether that is through CEST or an approved online tool.

If you do engage workers via limited or self-employed means and you meet the HMRC standards, so make sure you’re reviewing how you test and your contracts.

If you need any help with the topics discussed, or any HR issues, please don’t hesitate to get in contact at info@ezhr.uk or https://www.ezhr.uk/about

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