The best steps recruiters and recruitment agencies can take to stay on top of IR35 are to ensure they work with partners and providers who truly understand the details of the legislation, how it applies and how it will affect recruiters.

Quite frankly, as an agency, if you use a non-compliant umbrella company you could leave your business and your clients’ businesses wide open to financial penalties from HMRC.

UK businesses hiring contractors through UK agencies can be at risk if they do not look beyond the agency to check whether the real source of the workers lies offshore. Agencies promoting such schemes and their clients are at risk of being found to be the employer, in law, and therefore liable for unpaid national insurance contributions. They are also at risk of financial penalties under the Debt Transfer Legislation.

Personal service companies (one man Ltd Companies) are also not a risk free option for recruitment agencies with the Agency Workers Regulations, changes to IR35 tests and the association between PSC’s and tax avoidance.

We have invested considerable time talking with lawyers, accountants and recruitment agencies to understand the ramifications of IR35 for recruiters. So you can get on with placing candidates and earning commission, safe in the knowledge that your contractors are being looked after.