Accountancy firm Grant Thornton has announced the launch of a new AI tool to help businesses navigate IR35.
The tool, known as the Off-Payroll Workers (OPW) client solution, has been developed in response to HMRC ‘Check Employment Status for Tax’ tool (CEST) and the difficulties businesses have faced when using it.
Justin Rix, partner and head of tax at Grant Thornton, said: “Increasing focus on this area by HMRC is putting pressure on businesses that engage contractors.
“The new rules can be difficult to navigate for businesses and many are yet to engage with IR35, but leaving it too late could be costly.
“IR35 presents an opportunity for organisations to address their wider resourcing strategy to find the most effective and efficient way to create value from their people.
“Automating processes allows businesses to focus on other value-add activities, whilst offering peace of mind that risk in this area is managed.”
Time to act
“Based on our experience with IR35 in the public sector we recommend that businesses consider their position now, rather than waiting until April 2020, to allow time for all the necessary stages to effectively manage the change and to properly assess the impact of the new rules.”
The new tool will use AI to undertake status assessments of workers, and will help organisations prepare for impending legislative changes coming in April 2020 that are set to increase tax obligations in respect to contractors.
Grant Thornton claim that the tool will guarantee a decision every time and will give a risk rating flag highlighting the potential for challenge to the status decision.
It will also include a database to store and monitor the status of new and existing OPW employees and will send reminders for periodic reassessment of each OPW while they continue to work on behalf of an organisation.
The public sector saw the equivalent legislation introduced in April 2017, but the blanket approach to applying the legislation has cost engagement and reduction of supply chain, particularly in areas such as IT and finance, where workers prefer to operate as freelance consultants.