An overview of the Intermediaries Legislation (IR35), specifically how it affects limited company contractors. How to determine your risk of being caught by IR35, and how to protect yourself against a potential HMRC tax investigation.
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.
Get started with our IR35 guides
- Start off with our overview of IR35 for a concise guide to the legislation.
- April 2020 Private sector IR35 reform - what happens now?
- What clients can do prepare in advance for April 2020.
- 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.
The deadline for responding to HMRC’s consultation document on extending the off-payroll rules to the private sector has expired. So, how did the contracting industry’s biggest players respond?
HMRC has provoked the contracting community further by admitting that its online employment status tool (CEST) does not account for the Mutuality of Obligation (MOO), which is often cited as a key factor in IR35 case law.
For a relatively small outlay, a professional contract review service will analyse your contracts to ensure that you comply with IR35 – both in terms of your contract wording, but also the ‘working practices’ you undertake at your client site.
The Government has launched its long-awaited consultation into ‘off-payroll working’ (IR35) in the private sector.
A contractor won a key IR35 case against HMRC this week, which casts further doubt on the taxman’s ability to accurately recognise IR35 status.
Although the Chancellor didn’t mention IR35 in his Spring Statement speech, the Government’s written statement published shortly after suggests that an extension of the public sector off payroll rules to the private sector is still on the cards.
To protect yourself against IR35, you need to be sure that the wording of your contracts (and the way you actually carry out your contract work for the client) show that you are genuinely ‘self employed’. Here we show where you can download a sample contract template.
Ever since the Government first announced its intention to introduce ‘off payroll’ rules within public sector, the inevitable question has been asked – will these changes be extended to the private sector?
Reports in The Times and FT over the past few days suggest that the Treasury may be considering extending the ‘off payroll’ IR35 rules to the private sector.