The basics of IR35 should be understood by everyone in the contracting community at a fundamental level, as the rules have such a profound impact on take-home pay if you are caught. Here, an expert answers our questions on employment status – does your contract fall inside or outside 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
- IR35 off-payroll changes - our essential FAQs
Get started with our IR35 guides
The draft legislation which will make the off-payroll private sector IR35 rules law in April 2020 has been published today. With few amendments made, it disregards the concerns expressed by respondents to the recent consultation.
When the ‘off-payroll’ IR35 rules are extended to the private sector in April 2020, ‘small companies’ will be excluded as things currently stand. However, the exclusion itself may cause more complications for clients to deal with.
Many major tax and business groups have called for the IR35 off-payroll private sector reforms to be delayed until at least April 2021, as businesses simply won’t be ready to cope with the changes as things stand.
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.
With the planned extension of the IR35 off-payroll rules to the private sector due to go ahead in April 2020, a campaign to stop the damaging reforms from going ahead has been launched this week.
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.
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.
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.
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.