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  • Welcome to the I C Gs Digital Academy.

  • Webinar Siri's I'm Lucy Wernick, manager of the I C G.

  • Today's Webinar is about the I.

  • R 35 legislation presented by Liz Norman of recruitment consultants Elizabeth Norman International.

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  • So now, introducing our speaker today.

  • Liz Norman is the founder and CEO off Elizabeth Norman International, which specializes in recruiting both permanent and contract roles for the market research, data and insight industry.

  • With over 30 years knowledge of the industry, Liz has partnered with the number of leading industry bodies as well as working as a mentor to both individuals and clients.

  • Liz cares passionately about our industry on has been struck over the last months.

  • How, with how few contractors know anything about the i r 35 legislation.

  • So now we will hand over it is Ah, you.

  • I do, however, know Hello.

  • Hopefully you can use.

  • We can see you influence green.

  • Brilliant.

  • We can see your slot.

  • You can't see my slides.

  • Okay, I'm I can see my sides.

  • Is that made any difference?

  • Um, well, you know, we we can't see you anymore, but we've gone back to the holding page.

  • Okay, Um let me think what to do.

  • I can see that.

  • I can see it perfectly fine shows during my I would list, I would There we have got it.

  • Now, now, just impulse screen.

  • Okay.

  • You've got it in full screen.

  • Can you see it I've got it in full screen.

  • Um, yeah, go ahead.

  • Thank you.

  • Okay.

  • Sorry.

  • I'm as you can see.

  • No, not a technical person.

  • And this is, in fact, the first webinar I've ever done.

  • Um, so hopefully you can see it.

  • A t least part of the slide on a TTE the end.

  • I'll take questions.

  • So, I mean, the first thing I want to point out is obviously I am.

  • I own a recruitment company.

  • I'm certainly not a lawyer.

  • And even if I was a lawyer, I have to say that nobody can be sure of the impact of I r 35 all legislation.

  • When it first comes out, nobody knows how.

  • It's how it's actually going to be enacted, whether there's gonna be legal loopholes so I can only give you an overview.

  • At the end, I will give you the details of Lucy Tarrant, who is the lawyer that I have.

  • I spent a lot of time going through this with, and also I've got a lot of advice from Maps CO who are the professional regulator body for the recruitment industry.

  • So that's what I give you is as factually correct as possible.

  • so Yep.

  • That's the first slide.

  • Only I'm not able to move it forward.

  • Um, why such a baby expert combined?

  • Okay, so, um, I are 35 is coming into effect on the sixth of April 2020.

  • Now, when I say it's coming into effect is coming into effect for the private sector.

  • It was actually bought into the public sector in 2000 and 17 and since then, the recruitment industry has bean trying to stop its full implementation, mainly because we believe it's going to impact on the flexibility of employment on dhe.

  • Indeed, figures do show that the number of I T contractors has dropped quite a bit in the last year since its implementation in the public sector.

  • So we have had one breakthrough.

  • They're not going to apply it to small companies, which is important for our industry because we have a lot of small companies.

  • Ah, but nevertheless, we think it will definitely now come in on the sixth of April 2020.

  • We think it's very unlikely now that they will be able to stop it so bad news.

  • Um right.

  • And so what is?

  • I are 35.

  • Well, essentially it's all about tax.

  • The government believed that by having as many freelancers and contractors as we do in this country, they are missing out in billions of toe own tax.

  • They're doing this in two main ways.

  • First of a ll all employers pay employees Proia national insurance contributions.

  • Ah, 13.8% on what they pay you.

  • So you don't see that in in a pay slip.

  • But they are paying that in addition on all employees.

  • But they're not paying that on freelances.

  • And the government wants that money.

  • In short, the second thing is that freelances on the whole compay themselves more tax efficiently.

  • If the limited companies they compare themselves dividends, they can claim expenses.

  • They can put quite a lot of their normal so off home costs, for example, through as tax deductible expenses and the government want to stop last a swell.

  • So in short, that's what it's all about.

  • They're expecting to raise billions as a result of it.

  • Um, so the next slide, I'm I'm actually gonna address the second point here first, because when I have talked to people about it, a number of people have said Well, it doesn't apply to me because I'm a limited company and I work for lots of other organizations.

  • It's exactly that sort of organization that the government wants to start, so absolutely it applies to you.

  • The other point is the moving forward.

  • If you, the freelancer of the contractor, don't pay the right amount of tax than actually it's not going to be you that is fined by the government but the employer, which perhaps sounds a bit weird, but they government feel that if it's the employer that ISS find, then they can be pretty sure that this law will be taken seriously.

  • And indeed, several companies have just written down a few.

  • But Barclays R B s G.

  • S K have already come out and said that they won't be taking on freelances direct moving forwards a za result of this legislation.

  • So, um, sadly, yet that's going to be the impact.

  • Um, now there is a bit of good news.

  • I said, that the recruitment industry has bean lobbying to stop this legislation on what the government has agreed is that they won't apply it to small companies.

  • Now.

  • These are small companies as defined by the companies act on dhe.

  • I know this sounds really boring, but you should just have a quick look at this because this is your way around it.

  • If you are working for a company that any of the two things on this slide apply, so a turnover of 10.2 million or less, UM, 5.1 million or less on the balance sheet on 50 employees or less then, um, it's fine to carry on working for them as you are now.

  • Whether the government changes that moving forward, we don't know.

  • But for the moment, they're absolutely fine with that.

  • And I think one of the interesting things for the industry is, Does that mean that moving forward freelances are all working for small companies, allowing them to be flexible?

  • And it's the larger ones that miss out.

  • So, yeah, but I think this is quite an important point.

  • If you're working for a larger organization or a larger organization wants a freelancer, they can employ, um, someone or a small company as long as they say, um, cover, or as long as they meet all three points on this slide.

  • Now, these heirloom legal points they're not very clear, so I just try and go through them one by one.

  • So the 1st 1 is substitution.

  • This means that the freelancer must confirm to the employer that if they aren't able to work one of the dazed, uring, the contracting period, they have someone that can do it in their place.

  • So if you think if it's a small company that you were employing if, um, Fred was sick, then Frida would be able to pick up the phone on dhe, do the work in in France, a place.

  • It's basically saying exactly the same that you must have a set up where there are other people around that can do the work if you're not able to, and you have to provide river written confirmation toothy employer that this is indeed the case.

  • Um, the 2nd 1 is supervision, direction, and control on this essentially means that the freelancer should set the agenda.

  • I almost think about it as if you were taking on a plumber, for example.

  • Um, then you wouldn't tell the plumber exactly what to do.

  • You'd say something like the boiler is not working on The plumber is the one that would decide on the approach.

  • Advise how long it's going to take, tell you how much is going to cost on would complete the work without you closely supervising them.

  • You have to meet as a freelancer exactly the same criteria.

  • So the company would have to come to you with the issue, and you will be the one that would suggest how to approach it, how long it's going to take you, what it's going to cost.

  • If you can do that, then you can legitimately work for the employer as a contractor is a freelancer, and the 3rd 1 is mutuality off.

  • Obligation.

  • Um, this one really is very hotly debated and on almost everything you read about it says something slightly different.

  • But essentially it refers to financial responsibility.

  • So if the job isn't done to the employer satisfaction, is it acceptable not to pay the contractor?

  • If it is acceptable not to pay the contractor, then you'll be absolutely fine.

  • You'd be what they say outside.

  • I are 35 it would be okay to work for that employer as a contractor, Come and then to pass this last criterion.

  • It does help if you're no reliance on that company for income.

  • You should certainly have professional insurance.

  • Uh, it's it's useful if you're working for more than one employer.

  • But it's not just about that.

  • It's also about the employer saying yep is absolutely fine not to pay them if they're not doing a good job.

  • Okay, so they're the three criteria.

  • If you have any more questions on that, please let me know.

  • Ah, the next slide is all about cess.

  • So this is a government tool for evaluating whether the the job or the contract that they are giving you is one that is legitimately outside our 35 I.

  • It is possible to employ you as a contractor.

  • Um, this has just been is it's had loads and loads of criticism this tool, but it has just being reviewed.

  • I haven't had a chance to look at it since it's being reviewed and seeing how much it's improved.

  • Um, it's it's absolutely essential that employers use this tool to check that the role is okay.

  • If they have used a tool, then, um, they can say to the government, Yes, we we we've we've used it.

  • This person qualifies on dhe they reduce the chances of being find by quite a lot.

  • But it's useful for you to look at two.

  • So you understand the obligation that the employees got to meet The other thing.

  • I did look at it just before this webinar on I noticed.

  • Now it's gotten employment status manual, which has got a lot of detail in it.

  • So it might be worth you looking at that as well in order to see if you will qualify or not.

  • Sam, that's sexist.

  • Um, so if you are a larger organization on dhe, you are currently employing freelancers or contractors on.

  • They don't meet all three of the criteria that I discussed earlier.

  • Substitution soup, provisioned direction and control on mutuality of obligation and bear in mind.

  • You've got to meet all three.

  • Then what can you do if you desperately need a freelancer?

  • Well, there's two things that that you could do.

  • You can employ them through 1/3 party so you could employ them through someone like ASA Recruitment Agency.

  • All you can employ them through on umbrella company, which essentially is a sort of outside employment organization.

  • Um, we're not quite sure what organizations they're going to do moving forward, but that that's certainly an option.

  • The other thing that they could do is they could permanently employ you as as an employee.

  • Um, but they could put you on a zero hours contract on in that way.

  • You know, it doesn't matter what hours you work.

  • Obviously, they are not going to go through the paperwork of doing that unless you're a fairly long term contractor.

  • But that also is an option that you could discuss with him employers.

  • So the next slide.

  • So I just thought I should finish by just taking you through the things that you should do, because I know that's quite complicated.

  • So the first thing I would do is check the size of the employer of the organization that you're freelancing or contracting for.

  • Um, I've given you the three card, three car here.

  • For a small company.

  • It only has to meet, too.

  • It's actually very easy to look up a company's accounts on DDE.

  • When you do that on the government website, it says whether a company is small or not, so it's quite easy to get that information.

  • The second thing is, if you know It's a large company.

  • I don't know.

  • It could be anyone from Dogo to cantar to its source.

  • Then, um, but will you water your options?

  • Well, you could try to go outside.

  • I are 35.

  • I legitimately still work for them as a contractor.

  • If you're going to do that route, you have to in writing, confirm that you have a substitute.

  • You have to get confirmation from the client that the role is outside.

  • I are 35.

  • They having used assess tool, and you have to change contracts to reflect that that this is the way that you are working.

  • Moving forward on that The role meets all the criteria.

  • So substitution supervision on mutuality of obligation.

  • If that isn't possible, if this role does, it doesn't meet all those criteria.

  • Then you can work inside.

  • I are 35 but you need to do it either by becoming an employee off that organization or working through a recruitment agency or an umbrella company.

  • So it's possible there are ways around these things.

  • Um, I think that's it.

  • I think that's all there is to sail in here, I realized I just want to gallop through what is quite a confusing subject.

  • Um, hopefully you have some questions.

  • Do WeII do, I'm think, collecting them here.

  • So everyone feel free to carry on typing in your questions and we'll try and get through a CZ many as we can.

  • So just going in in order.

  • Um, right.

  • There's a There's a question about always sending out publishing the slides at the end on dhe.

  • Also, can this person share the slides with?

  • They are They're small company clients.

  • That's feet a few days.

  • Yes, I'm trying I've been doing is much as possible to inform the industry.

  • I'll be honest and say that most companies at this stage are very unsure about what they want to do.

  • And a lot of them really don't want to listen.

  • But yeah, I am.

  • I'm doing what I can.

  • I'm very happy to send outsides.

  • Um, so anyone, Both both contractors and clients.

  • Okay, well, that's great.

  • And we'll put them on the ice to the website then as well.

  • Thank you.

  • Thank you.

  • Next question about the criteria of the substitution.

  • Does the stub substitute need to be guaranteed by the freelancer?

  • So if I can't work a specific day.

  • Do I need to provide another person for doing the agreed work on that day?

  • You need to You need to say that you can do that.

  • I mean, obviously, in reality.

  • For example, if you're, um ah, qualitative freelancer in your moderating groups, um, then you need to know another moderator who can do those groups for you.

  • You I can't.

  • They don't expect you to guarantee that there will be free on the day that you're sick.

  • So they may be sick too.

  • Or they may have gone on holiday.

  • But you've You've got to You've got to guarantee that you know, somebody that potentially could stand in and do that work assess.

  • I think