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Posted 27th November 2018

A guide to the self-employment process for agencies

For any agency working with self-employed contractors, there are a number of factors that must be integrated into your processes that will ensure you provide a compliant service to the client and contractor alike.

Take a look below as we explore some of the key steps to consider when working with a self-employed contractor and how your agency should incorporate these factors into your recruitment process.

Supervision, direction and control (SDC)

Should a contractor be told HOW to carry out their work, someone has the right to tell them HOW to carry out the work stipulated in a contract or the contractor’s work is overseen throughout the process, then they are likely to fall within supervision, direction and control.

Contractors subject to SDC cannot be deemed self employed and therefore are unable to be a part of the government’s Construction Industry Scheme (CIS). Many contractors in situations like this, choose to establish their own limited company, as subsequent SDC tests will operate in a slightly different way, putting the matter in the individual’s hands.

Agency Workers Regulations

Introduced in 2011, the Agency Workers Regulations were put in place to provide temporary agency workers within the same basic employment rights within a business, that permanent employees received, following an initial period of twelve weeks. These rights include, equal pay, breaks, overtime, public holidays and many more.

For contractors, AWR becomes slightly more complicated, they must first identify their status with regards to the regulations in the first instance. Contractors operating under a limited company will be unlikely to fall within the regulations as they are, in essence, providing a service as opposed to working a temporary contract.

IR35

The entire contracting and agency community should be relatively familiar with IR35 legislation at this stage, due to the huge amount of coverage on reforms to the public and private sector over the past two years.

Due to reforms introduced in 2017, agencies working with public sector contractors must now identify said contractors’ IR35 status prior to the commencement of any contract. And with private sector reforms set to be introduced in April 2020, businesses across the UK must assess their current procedures to ensure they have the capacity and knowledge necessary to be able to accurately determine contractor status.

Is your agency looking for support in working with self employed contractors? Contact the Exchequer Solutions team today to discuss your requirements and discover how our agency services can benefit your business.

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