Currently, the responsibility of who determines the IR35 status of a contract usually lies with the contractor, in most cases. However, from April 2021, this responsibility will shift away from the contractor and on to the agency, or end-hirer.
Unless the end-hirer is considered ‘small’, they will need to conduct a IR35 assessment and provide this to your agency, if there is one involved. This IR35 assessment will consider whether the current contract is ‘inside’ or ‘outside’ IR35. The actual rules around how to determine the assessment will not change, however since your agency or end-hirer will now be responsible for any unpaid tax on a wrong determination, it could be likely they will edge on the side of caution.
How will this affect you?
The changes to IR35 could affect you significantly. Agencies and end-hirers will now be required to review all active and new contracts to determine their IR35 status. This may see them taking a different view altogether and contracts that you determined to be ‘outside’ are now changed to ‘inside’.
As a result, it is likely that end-hirers or agencies will take the view that reviewing their contractor base is too complicated and time-consuming and may simply determine that all contracts to be deemed ‘inside’. In some cases, they will simply refuse to work with limited company and only allow Umbrella workers.
We have 15 years of experience in the contractor market and have IR35 in-house experts to help guide you through the process. Whether you can continue to work compliantly through your limited company or use our new FLEX switching solution will be able to help you through the changes.
GET YOUR OPTIONS ASSESSED
Don’t delay in ensuring you understand your options. Whether your contract is due for renewal before or after April 2021 knowing what might happen and how this affects you will keep you one step ahead.
FLEX: SWITCHING SOLUTION
Whatever your future status under IR35, get peace of mind now, knowing that our FLEX solution, included in all our packages, allows you to switch between limited company and Umbrella whenever you like.
What should you do now?
Getting prepared early for April 2021 is essential to ensure you, your agency and end-hirer are ready in plenty of time. Don’t wait until it’s too late.
If your agency, or end-hirer hasn’t been in touch regarding the changes, ensure you start a conversation with them about what they intend to do.
We can help provide an assessment of your IR35 status using our IR35 assessment tool.
Please contact us to see how an assessment might help you.
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IR35 news and articles
Selected articles from our blog regarding IR35 and the upcoming changes due in April 2021.
Christa Ackroyd Media Limited v The Commissioners for Her Majesty’s Revenue and Customs – Round 2 – An example of how NOT to operate outside of IR35
One year and seven months after we considered ‘Why was Ms Christa Ackroyd deemed inside of IR35?’ by the First Tier Tribunal, we now look at the decision of the Upper Tribunal, on appeal by Christa Ackroyd Media...
IR35 Watch – Results of the Government’s formal consultation on proposed changes to off-payroll in the private sector and industry responses.
A month on from the end of the Government’s formal consultation on proposed changes to off-payroll in the private sector, and its time to consider the proposed changes, how these will affect you as a Limited Company...
IR35 Update - March 2020 The off-payroll reforms to IR35 in the private sector have now been delayed by 12 months due to the coronavirus pandemic. The legislation will now be reintroduced in April 2021. This is a...
HMRC's IR35 Business Entity Tests (BET), used to supposedly identify whether given contract engagements were at risk of being caught by IR35 or not, is to be withdrawn. The test was introduced in 2012 and comprises a...
In the light of HMRC's recent updated and 'clarified' advice on IR35, Abbey Tax, a leading authority on IR35 cases, has also provided some key tips for contractors. We summarise them in this article as follows: There...
Although the written terms within a contract are very important in assessing any potential IR35 issues, there is another aspect which needs to be factored into the assessment and that is the working practices between...
In certain circumstances, contractors are offered shares by their end client as part of the contract terms and of how the payment for the contractor's services is structured. The shares may be offered as an...
The House of Lords inquiry into the use of personal service companies ('PSCs'), those limited companies used by freelance contractor and consulting businesses, has given its verdict. In summary, it...
Following the conclusions announced recently, by a leading law firm, that the forthcoming "Onshore employment intermediaries: false employment legislation" (proposed in the Finance Bill 2014), will not affect personal...