IR35
IR35: need to know
what is changing & how can you protect your business?
IR35 tax legislation has been around since 2000. It’s designed to ensure tax contributions are accurately made by self-employed workers. From 6 April 2021 IR35 ‘off payroll’ rules will apply to medium/large businesses in the private sector; small businesses are exempt. These rules already apply to the public sector since April 2017.
We want to reassure you that all our processes already comply with HMRC guidelines and are 100% IR35 compliant:
- No IR35 risks – all workers paid via our own internal PAYE payroll
- ISO 9001 accredited – audit ready 24/7 with 100% audits passed
- REC professionals – as corporate members of the Recruitment Employment Confederation we stay one step ahead of regulation changes and understand employment law.
What’s Changing?
It is now the clients (not contractor) responsibility to assess the IR35 status (inside or outside IR35) of each assignment, where the services are provided by a contractor working through an intermediary (LTD/umbrella). Read more about these changes in the HMRC guide.
INSIDE IR35
If the self-employed workers is under supervision, direction and control like an employee, then that assignment is deemed to be ‘inside IR35’ rules and subject to PAYE tax.
OUTSIDE IR35
The worker operates as a genuine business, not under supervision, direction control and therefore is operating outside of the IR35 rule.
WHAT NEXT?
Understand the IR35 rules and speak to a compliant recruitment partner who can help you prepare. In some case LTDs are perfectly legitimate, and in some cases they’re not.
GET IT RIGHT
Because HMRC will hold the end client liable, we strongly recommend you do some checks on your supply chain to ensure your self-employed agency workers are paying accurate tax.
DO YOUR CHECKS
- Are they paying workers compliantly – risk free?
- Are contractual agreements fit for the future?
- Up to speed with HMRC ‘off-payroll’ working rules?
- Up to date on immigration & employment laws?
- Aware of what you need to do to prepare for IR35 to ensure your business is protected?
