The date is fast approaching on 6 April 2020 amid #COVID19. changes are still going ahead.
Many companies, contractors, freelancers and business owners are asking “what do I need to do about IR35”, and “What is off-payroll working?”. This article explores IR35 and why you may, or may not, need to worry about it.
What is IR35?
IR35 is a term used to describe two sets of tax legislation. This legislation is designed to combat tax avoidance by workers, and the firms hiring them, who are supplying their services to clients via an intermediary, such as a limited company, but who would be an employee if the intermediary was not used.
What is off payroll working?
Off payroll working is a phrase often used to describe workers who are not employed by the company they work for but submit invoices to the company instead. In April 2020 there the “The Off-Payroll (IR35) legislation” is being extended from the public sector to the private sector. Contractors and hirers who are considered "inside IR35" could pay significantly more tax.
Who needs to worry about IR35 and off payroll working?
There are two main categories to consider when thinking about IR35 and off payroll working.
- Self employed: If you consider yourself to be self-employed. It may be that you are being told you need to be an employee (and accept the financial consequences that involves). This may be the case even if nothing else has changed for your work status.
- Companies: If your company has been paying workers via personal service companies or agencies. Should HMRC find your company to have employees (not workers in another company, e.g. a personal service company), your company will be liable for employee benefits plus PAYE and NI. These costs will be applied retrospectively. However, it will cost more to have those people as employees.
The financial consequences for both sides are being predicted to result in a potential shortage of people with the required skills being available as needed.
What do I need to do about IR35?
If you are an Individual, currently working within IR35, ensure your role can still be within IR35. This is by drawing up effective contracts and making a few changes in processes and ways the work is conducted
If you run a company, or organisation with roles covered by workers on an IR35 basis. You want to ensure that your people will still be within the IR35 legislation. This means drawing up effective contracts and making a few changes with how the people work and what they can do. You may also need to find ways of funding worker who will have to become employees, as that will cost you more.
How can Alan Patient & Co help with your IR35 issues?
We can help you if you are an individual looking to remain within IR35, and we can help companies who want people to remain within IR35.
If the company your work for is insisting you have to be an employee, we can help you plan accordingly e g in what you negotiate for with your now employer and with what you do with your limited companies
If you would like us to talk to you about what you need to doing, please contact call on 020 8532 9843 or click the link https://alanpatient.com/contact-us/
Would an IR35 workshop help you?
We will soon be hosting workshops for individuals and companies. If you are interested in attending please call Karen on 020 8532 9843, or email firstname.lastname@example.org