The forthcoming (April 2021) off-payroll rules in the private sector have led to much discussion about the use of consultancies as a potential workaround.
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 2021
The 'off-payroll' addition to the existing IR35 rules was rolled out across the publc sector in April 2017. The rules will also hit private sector businesses from April 2021. The planned rollout was deferred from April 2020 due to the COVID-19 crisis. These new rules mean that clients (not contractors themselves) will be responsible for determining the employment status of contractors.
Here are some of our most-read articles:
- April 2021 Private sector IR35 reform - what happens now?
- What clients can do to prepare in advance of April 2021.
- What contractors can do to mitigate against the IR35 changes
- IR35 off-payroll changes - our essential FAQs
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.
Essential IR35 Newsletter
- Make sure you subscribe to our newsletter for the very latest on the IR35 private sector changes - subscribe here.
Does the IR35 legislation apply to sole traders?
With new private sector off-payroll rules set to take effect on 6th April 2021, is working as a sole trader a smart way to ensure your contract work falls outside IR35?
Practical steps engagers can take to mitigate against IR35 private sector changes
With IR35 reforms being applied to private sector organisations from 6th April 2021, here we look at ways clients/engagers can prepare their businesses in advance of the implementation date.
IR35 private sector changes – Essential FAQs
The forthcoming off-payroll changes to the private sector represent a massive challenge to the contracting industry. Here we have included some of the most common FAQs we’ve been asked about the IR35 reforms.
Practical advice for contractors in advance of the private sector IR35 changes
With private sector IR35 reform looming, we asked a leading IR35 advisory firm what practical steps professional contractors can take now to prepare in advance for the changes.
IR35 and ‘Confirmation of Arrangements’
A confirmation of arrangements letter from your client can be used to back-up your IR35 position with HMRC should it be challenged, as it confirms how you perform your contract duties in reality.
IR35 history – a concise timeline from 1999 to date
The Intermediaries Legislation (aka IR35) was first mentioned in a 1999 Inland Revenue press release. Here we look at the key events which have taken place over the past 20 years, and the status of IR35 in 2020.
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’?
PSC contractors caught by Off-Payroll – how do payments work?
If you work on an ‘inside IR35’ contract post-April 2021, then your fee-payer (agency or client) will be responsible for deducting taxes from your contract income, but exactly how is this income taxed before your limited company receives funds?
Off-payroll (IR35) – what is a Status Determination Statement (SDS)?
Under the off-payroll rules, from April 2021, private sector clients are responsible for determining a contractor’s IR35 status. The decision must be contained within a Status Determination Statement (SDS), alongside the client’s reasoning.
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