As the landscape of modern work continues to evolve, Chris James, Director of Accounting Services at Workwell (formerly known as JSA) and Chairman of the Freelancer and Contractor Service Association (FCSA), talked to us about how essential it is for clients to be able to depend on their accountant.
The challenges of IR35
Outsourced accountancy services for contractors have become more complicated recently, especially with the new IR35 reforms coming up in April 2021.
These changes will mean the responsibility for determining a contractor’s IR35 status will move from the contractor to the hirer, which will consequently see agencies facing liability for any unpaid tax. As many recruitment agencies will now be focusing their efforts on mitigating financial risk, it’s more important than ever that limited company owners can independently manage their accounts with confidence.
“Although there will be some contractors who can no longer work ‘outside’ IR35 compliantly, we'd like to help as many as possible to remain ‘outside’ and support those who can’t with a new working solution. To manage this, we need excellent accounting software that works hard for our contractors. By providing all our contractors with FreeAgent’s innovative accounting software, we’ve given limited company owners the ability and freedom to monitor their own finances in real time whenever they are operating ‘outside’ IR35.”
However, for those who can’t operate ‘outside’ all the time, Workwell offers a smart solution: the ‘toggle’ service. This allows contractors to keep working on ‘outside’ assignments, manage their finances independently with FreeAgent and to pause when necessary to work on ‘inside’ contracts through Workwell’s FCSA-accredited Umbrella company.
“Within Workwell, we've constantly been thinking of new, innovative solutions to help contractors navigate the reforms and one option that we’re now offering contractors is the ability to toggle between PSC and Umbrella as they negotiate from ‘inside’ to ‘outside’ contracts and back again.”
“Having access to a tool like FreeAgent’s accountancy software has made our toggle offering that much more simple - as we know that when clients are working on an assignment through their own limited company, they can connect to their accounts in real time, submit invoices and keep track of their expenses. And, when they then switch over to Workwell Umbrella for another assignment, we'll manage their finances for them until they’re ready to pick up another ‘outside’ contract. When this time comes, they can log right back into FreeAgent. The flexibility is amazing.”
“Plus, knowing that FreeAgent’s MTD software is compatible with HMRC regulations was a priority for us because compliance with IR35 and other legal requirements is always at the top of our agenda at Workwell.”
Workwell’s toggle solution has been a great option for their contractors who are starting to think about how they will navigate IR35 reforms. It means that contractors don’t have to switch permanently to ‘inside’ contracts if they don’t want to, allowing them some much-needed flexibility.
“Looking at the wider picture, beyond April next year, working with MTD software will continue to remain important within the contractor accountancy industry. The IR35 reforms are going to continue to impact the way contractors can work and the kinds of assignments they can work on, which will no doubt cause some unrest.”
“But, we can help contractors to relax and calmly navigate the reforms by providing them with FreeAgent’s trusted and compliant accounting software coupled with advice from their own dedicated accountant at Workwell. These two services can work together to allow contractors to stop worrying about IR35 and claim back independence over their finances when operating ‘outside’, or ‘inside’, IR35.”
Find out more about Workwell here.