The Government has launched a new consultation on the ‘off payroll’ private sector IR35 extension. Here we look at what this exercise involves, and what the Treasury hopes to achieve from it.
IR35
The Intermediaries Legislation was introduced in 2000 to tackle 'disguised employment', where an individual uses a limited company to carry out professional services, but works in a manner more like an 'employee'. Your take home pay will be significantly lower if your contracts fall within its scope.
Private sector IR35 changes from April 2020
So-called 'off payroll' changes to the IR35 rules were made to public sector organisations from April 2017, and will also hit private sector businesses from April 2020, following an announcement in Budget 2018. These new rules mean that clients (not contractors themselves) will be responsible for determining the employment status of contractors.
A consultation on how the private sector changes will be rolled out was published on 5th March 2019 - read our summary here.
- April 2020 Private sector IR35 reform - what happens now?
- What clients can do to prepare in advance of April 2020.
- What contractors can do to mitigate against the IR35 changes
Get started with our IR35 guides
- Start off with our overview of IR35 for a concise guide to the legislation.
- Expert FAQ - Are you 'inside' or 'outside' IR35?
- Try our IR35 tax calculator to find out the financial cost if you are caught.
- Why you should consider taking out IR35 insurance cover.
CEST – HMRC’s IR35 status tool – what it does, and why it is flawed
Nothing makes critics of the IR35 ‘off payroll’ legislation (and there are many) more irate than the mention of CEST – the official online tool which is meant to help determine employment status.
Practical advice for contractors in advance of the private sector IR35 changes
With private sector IR35 reform barely over 12 months away, we asked a leading IR35 advisory firm what practical steps professional contractors can take now to prepare in advance for the changes.
Why there is no such thing as an ‘IR35 accountant’
Although you should expect all contractor-focused professional accountancy firms to be highly IR35-literate, some still like to advertise themselves as ‘IR35 accountants’, which is a misleading term.
Practical steps engagers can take to mitigate against IR35 private sector changes
With IR35 reforms being applied to private sector organisations after April 2020, here we look at ways clients / engagers can prepare their businesses in advance of the implementation date.
The key factors which determine your IR35 status
The main factors used to establish whether or not an individual’s contract is caught by IR35 – the most important being Control, Substitution and Mutuality of Obligation. How to ensure that you’re not caught.
IR35 – are you in business on your own account?
To ensure that any contracts you undertake are not caught by IR35, you need to be able to demonstrate that you are not a disguised employee, but truly working in the manner of a small business owner. In other words, can you show that you are ‘in business on your own account’?
Does the length of a contract determine IR35 status?
There is a common misconception that contract duration automatically has a bearing on IR35 status. Here, Martyn Valentine looks at why other factors are more likely to be significant than contract length in determining employment status.
Why a right of substitution is vital in determining IR35 status
Although a combination of factors will determine whether or not a contractor is caught by IR35, some factors carry more weight than others. Here, Martyn Valentine looks at the vital role the right to substitution plays in determining IR35 status.
April 2020 private sector IR35 changes – what happens now?
The IR35 ‘off payroll’ rules will be extended to the private sector from April 2020 onwards, directly affecting a large number of contractors. What exactly does this mean, and what can contractors and clients do to prepare in advance?
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