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LEADING OIL AND GAS OPERATOR DEMONSTRATES BEST PRACTICE IN IR35 PREPARATIONS

ITHACA ENERGY

CASE STUDY

Ithaca Energy is a leading North Sea independent oil and gas company, whose strength lies in its talented workforce of approximately 400 workers. In addition to onshore and offshore employees, contract workers are vitally important to the success of the business.

With reform to the way businesses engage contractors initially due to arrive on 6th April
2020, before being delayed by 12 months due to COVID-19, Ithaca Energy prioritised preparing early for changes to the off-payroll working rules, also known as IR35.

Ithaca Energy Logo
QDOS COMMERCIAL SERVICES PROVIDING YOUR BUSINESS WITH THE TOOLS AND RESOURCES TO MANAGE IR35 CHANGES IN THE PRIVATE SECTOR

THE CHALLENGE

Through their ongoing risk assessment processes, Ithaca Energy pinpointed IR35 reform as a regulation that required careful management and external support early on.

Having first discussed the changes internally with key stakeholders, along with Oil and Gas UK, external tax and IR35 experts including Qdos, and other operators in the industry, Ithaca Energy developed a solid understanding of the reform.

Recognising that contractors touch many areas of the business, Ithaca Energy had the foresight to create an ‘IR35 Working Group’, responsible for managing the project.

Through this, the business identified a requirement for external support and expertise to support the company.

Soon tasked with administering the IR35 rules, Ithaca Energy needed to ensure they had assessed all existing and newly engaged contractors from an IR35 perspective before the original date of 6th April 2020, presenting two key challenges:

  1. determining whether individuals were considered supplier employees or contracted on a PAYE or limited company basis
  2. understanding how the business would confidently conduct individual assessments
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We are confident in our approach to IR35 both pre and post reform. We believe that our processes are robust, fair and transparent. We are clear on key milestones, such as re-engagement of our contractor workforce and with suppliers and do not envisage any issues when the legislative reforms come into force.

Qdos has provided and continues to provide us with an end-to-end service that helps us meet our IR35 legislative obligations. The toolkit and knowledge Qdos delivers enables us to manage our contractor workforce in an effective and efficient manner.

Carol Norrie

SCM Category Manager

Ithaca Energy Logo

THE SOLUTION

Ithaca Energy required a trusted partner to support each element of their IR35 project plan. They required expert guidance and a clear audit trail to give the business confidence that the correct processes would be in place to manage the reform compliantly well before April 2020.

Qdos were chosen to help ensure a robust, compliant and transparent approach to the changes. With 20 years of IR35 expertise, Qdos assisted throughout, helping Ithaca Energy to identify the end-user when working with suppliers in addition to creating an end-to-end process for compliant assessments.

With this support, Ithaca Energy will be able to confidently continue engaging legitimate contractors ‘outside IR35’, whilst also mitigating the risks the reform presents when the  changes arrive on 6th April 2021.

HOW QDOS HELPED

IR35 AUDIT

An audit of processes, systems and strategy helped Ithaca Energy determine their preparedness for reform as well as next steps

TRAINING

Knowledge was a core component of Ithaca Energy’s strategy. Expert training brough stakeholders up to speed on IR35

STATUS REVIEW

Committed to a fair and compliant approach, Qdos conducted case-by-case IR35 assessments of contractors engaged by the business

SUPPORT

Qdos’ team of experts were on hand to offer trusted and objective advice on processes and best practices throughout

INSURANCE

With IR35 insurance in place, Ithaca Energy has protected its business from the risks of the legislation

KEY TAKEAWAYS

Ithaca Energy share the following advice for other businesses preparing for 2021:

  1. Engage early and cross functionally with all stakeholders
  2. Communicate regularly with contractors and agencies about processes and outcomes
  3. Remember that IR35 reform does not mean you cannot engage contractors, only that businesses must prioritise compliance
  4. Be honest and accountable when reviewing and implementing processes

MORE INSIGHTS

QDOS COMMERCIAL SERVICES PROVIDING YOUR BUSINESS WITH THE TOOLS AND RESOURCES TO MANAGE IR35 CHANGES IN THE PRIVATE SECTOR
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