How Are You Managing Your Personal Risk?

Published on October 9, 2016 | By Sarah-Jane Ellis

Procurement thought leader Sarah Ellis discusses how Interim Managers can manage their own companies risk.

Managing Risk

Risk is an important consideration for all organisations and for procurement professionals; it really lies at the heart of what we do. On a daily basis, we identify and manage supply chain risk – protecting the business interests of the organisations we work for.

As many of you will know only too well, over the years it has become more complex and far-reaching and the consequences potentially more damaging. Our profession has risen to these challenges – developing new approaches, tools and techniques to manage this risk – underpinned by a sound strategic vision.

Of course, this is an extremely interesting topic and one that’s well-documented, with many learned articles at our disposal. But how often do we apply these principles to managing risk in our own careers?

For those who work through their own limited companies (a growing trend) it has never been more critical to be on top of potential risks; with the likelihood of falling foul of increasing business regulation with the potential impact being costly and damaging. One piece of tax legislation which has attracted much debate is IR35 – designed to tax ‘disguised employment’. It came into force in April 2000 and continues to evolve. There is a wealth of information available on the internet and through sites such as Contractor UK and Contractor Weekly

Many interims have developed their own risk strategies to mitigate IR35. These include:

Contract review – to determine if the contract falls within IR35 or not.

Confirmation of Arrangements – confirming the working relationship, between contractor and client, is outside IR35 (I like the one suggested by QDOS

Others go further and take out specific insurance to cover themselves, of which there are a number on the market. These range from those just covering the costs of an HMRC investigation to a more comprehensive cover, including the costs of any interest and penalties if deemed within IR35. The route adopted will undoubtedly vary by individual depending on their view of the likelihood of a challenge by HMRC, and the accountancy costs involved plus your time in dealing with an investigation, and more seriously, the putative financial damages levied (interest and penalties).

Having weighted up my IR35 risk, I sought professional advice and consequentially I took out the appropriate insurance policy.

However, like all insurance policies you do not know how good it is until you need to use it!!!