Don't let COVID eclipse other supply chain risks, CHAS warns

Supply chain risk management organisation, CHAS is warning companies to prepare for a raft of changes that may have been eclipsed by recent COVID-related contingencies or pressures.

Among them, delayed IR35 changes, which govern whether an individual working as a contractor or freelancer is deemed an employee on payroll for taxation purposes, are due to go ahead in April 2021. The changes mean medium and large businesses will be responsible for determining whether IR35 applies and could face financial penalties for non-compliance.

Companies that have not already done so should audit their current contractor base to determine who falls inside and outside of IR35, CHAS says. The HMRC’s CEST tool (https://www.gov.uk/guidance/check-employment-status-for-tax) can be used to carry out a check on status.

Also slated for April, contractors bidding for government contracts above £5m a year will need to be able to pay at least 85% of invoices to their supply chain in 60 days and have an action plan for how they will pay 95% in 60 days. Contractors that fail to meet these requirements may be suspended from winning any further government contracts until their payment performance improves.

The supply chain risk organisation has also warned that while vaccination developments are good news, they are not an overnight fix; businesses will need to continue to manage the risk of coronavirus in 2021. This includes checking the issue is being taken seriously throughout the supply chain and looking for evidence that contractors are committed to COVID-secure practices.

Reinforcing expectations around health and safety is particularly important if companies have diversified supply chains.

CHAS also suggests companies consider pre-employment screening to ensure competence, as well as the right to work among the workforce – all of which can help prevent modern slavery, manage health and safety risks, and ensure supply chain security.


Image courtesy CHAS

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