IR35 - What it means for you

Posted by Chloe Burrell on 15 Jan 2020 in recruitment  

On 6th April 2020 the plans for IR35 will go ahead - whether you’re an agency, client, contractor or freelancer it is essential to be familiar with the basics of IR35.

What is IR35 and who does it apply to? IR35 only applies to workers operating through limited companies, also called Personal Service Companies or PSCs. It does not apply to umbrella company workers, direct employees on PAYE payrolls, or self-employed sole traders. 

IR35, or Intermediaries Legislation, is a piece of tax legislation. Originally introduced in 2000, the intention was to ensure that individuals who were doing the same work as employees but who operated via an intermediary would potentially be subject to the same National Insurance Contributions and tax as an employee would. 

new-images/ir35.jpgThe HMRC has said: “The aim of the legislation is to eliminate the avoidance of tax and National Insurance Contributions (NICs) through the use of Intermediaries, such as Personal Service Companies or Partnerships, in circumstances where an individual worker would otherwise, for tax purposes, be regarded an employee of the client”.

Where can you find out how IR35 will affect you? 

Take a look at Liquid Friday – an FCSA Accredited Umbrella Company they have put together valuable information on everything you need to know, whether you are a client, contractor, freelancer or recruitment agency.

Here you’ll also find access to the IR35 testing tool from IR35testing.co.uk which enables workers, agencies, and clients to independently evaluate the IR35 status of their contracts, based upon their responses and IR35 case law.

Information on off-payroll working rules can also be found at WWW.GOV.UK

If you would like to discuss what IR35 means for you with regards to the recruitment market-place call one of our Account Managers today on 0117 959 2008.