The Treasury has announced a review into the ‘off payroll’ (IR35) rules, seemingly aimed at making the private sector rollout as smooth as possible, rather than as a precursor to making much-needed changes to the underlying legislation.
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
- IR35 Calculator - how much will it cost you if you are caught?
Get started with our IR35 guides
A number of high profile clients will stop engaging limited company contractors in 2020 due to the private sector off-payroll changes. What should you do if you are affected? We ask a well-known IR35 expert.
When end-clients determine the IR35 status of contractors in the private sector from April 2021 onwards, they are tasked with taking ‘reasonable care’ when making employment status decisions.
Barclays has told its contract workforce that it will no longer engage contractors who operate via limited companies, as a consequence of the forthcoming private sector IR35 off-payroll changes next April. Other firms are taking similar measures.
If you decide to cease trading via your limited company following the private sector IR35 changes in April 2020, you should take great care when chosing the best way to exit, as well as the alternative ways to operate as a contractor.
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.
Around 1,500 GlaxoSmithKline contractors have been sent identical letters from HMRC, accusing them of being ‘disguised employees’ – and therefore subject to the IR35 rules.
If your contract work is caught by IR35, your tax bill will rise considerably. Here, we use our IR35 calculator to work out the financial impact on contractors earning between £250 and £1000 per day.
If you are caught by the off-payroll IR35 rules, you may decide that there is no point keeping your limited company active. However, this isn’t necessarily the case, as a leading accountant explains.
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?