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.
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.
The 'off-payroll' addition to the existing IR35 rules was rolled out across the public sector in April 2017, and the private sector in April 2021.
[Oct 17th 2022] The April 2023 Off-Payroll repeal will no longer happen.
The 'Off Payroll' rules mean that clients (not contractors) are responsible for determining the employment status of contractors. Prior to this, workers themselves were responsible for this determination.
Get started with these IR35 guides
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.
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?
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.
** BREAKING NEWS 17th March 2020 – The Off-Payroll (IR35) private sector changes have been deferred until April 2021 – read more here. ** 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 […]