The research looked at how the reforms affected public bodies’ ability to fill vacancies, given that some off-payroll contractors may be unwilling to work inside the off-payroll working rules if they perceive it to impact their take home pay. Most public bodies (central bodies: 58%, sites: 70%) reported that their ability to fill contractor vacancies had not changed since April 2017, when the reforms to off-payroll working came into effect. However, approximately one in three central bodies (32%) and one in five sites (22%) reported that it had been more difficult to fill contractor vacancies. Qualitatively, some of those that had reported difficulties in filling vacancies felt there were fewer suitable contractors available in the marketplace since the reforms and that the process of filling contract vacancies had become more time consuming after the reforms came into effect. It was felt by some that difficulties in filling vacancies were more pronounced among roles where there had been pre-existing challenges with recruitment, for example, for doctors and social workers. Some public bodies stated that some of the challenges that the off-payroll working reforms presented in filling vacancies were short-term, and that contractors and agencies had become more accepting of the changes after the initial bedding-in period. Use of off-payroll contractors The most commonly mentioned roles that central bodies filled were in education, administration and medical roles. For sites, the most common roles were in education, facilities management, and IT. Typically, public bodies directly engaged off-payroll contractors for roles where only a small number of specialists were required (e.g. engineers and lawyers), while agencies were used to recruit roles required in larger numbers (e.g. nurses and social workers). Public bodies used off-payroll contractors for a variety of reasons. Some needed them to deliver projects or fill roles which required specialist skills or knowledge, or to fill temporary vacancies. Others mentioned they needed contractors on a long-term basis because of shortages in supply in some areas of the labour market, or because it was considered a convenient way to procure workers by offering flexibility in workforce planning. Contractor rates The research also explored what impact the reforms had on the gross-hourly rates paid to contractors, due to the potential of off-payroll contractors who fall inside the off-payroll working rules increasing their pay rates to cover relevant employment taxes. The majority of public bodies reported that the reforms had no effect on the gross-hourly rates paid to off-payroll contractors (central bodies: 63%, sites: 78%). A minority (28% of central bodies, 20% of sites) reported that the reforms had led to them increasing the gross-hourly rates paid to off-payroll contractors. Qualitative evidence showed that where off-payroll contractors or their agencies had requested that rates be increased, it was to cover reductions in take-home pay after contractors were assessed to be within the off-payroll working rules. Complying with the reforms Around half of central bodies (49%) and sites (57%) found the off-payroll working reforms easy to comply with. Public bodies were most likely to think that compliance with the reforms had been easy because they had suitable systems in place; this was reported by 45% of central bodies and 28% of sites who found complying easy. It was also common for public bodies to attribute their easy experience to HMRC’s online assessment tool (Check Employment Status for Tax Service, also known as CEST), which enabled them to make quick and easy assessments (reported by 34% of central bodies and 26% of sites). Notably, over a quarter of sites (27%) that had found it easy to comply with the reforms said that this was because they were a small establishment. Conversely, central bodies who found complying difficult most commonly attributed this to difficulties using CEST (43%), although qualitative evidence suggested its functionality had improved since being introduced and it was now fit for purpose. Sites that found the reforms difficult to comply with most commonly mentioned not being confident in their understanding of the legislation (39%). Qualitatively, some public bodies reported that they initially struggled with implementation due to needing to understand the legislation in a relatively constrained time period, and there was a perception that the guidance had repeatedly changed which made this task more difficult. In most cases, public bodies felt their understanding improved over time, although a few still lacked understanding about rules relating to substitution and the provision of equipment in August 2017.
The reforms to off-payroll working meant that some public bodies were required to adapt their recruitment process and spend time educating members of staff about what the changes would mean for their teams/departments.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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