Do IR35 changes apply to me?

IR35

IR35 reforms are set to hit the private sector in April 2020 and a lot of contractors are still none-the-wiser as to whether or not it will directly affect them. It can be hard to gauge because to know if it will affect you, you need to know if it will affect the businesses you work for.

We’ve pulled together a quick guide to help you understand if IR35 reforms will affect you or not. However, this is by no means exhaustive and we recommend chatting with your clients as well.

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IR35 in the Private Sector – what end-hirers should be doing

IR35

A guest blog by Matt Fryer – Compliance Director, Brookson Legal Services

The “Off-payroll working rules from April 2020” consultation document issued by HMRC on 5th March 2019 (“Consultation Document”) reaffirmed that the Off-Payroll Rules, in force in the public sector, will be extended to the private sector from 6 April 2020.

Currently, in the private sector, contractors are responsible for assessing their own employment status. The effect of the April 2020 changes is that the medium and large sized businesses who use contractors (“end-hirers”) will need to identify impacted roles and assess the employment status of those roles to determine whether they are Inside or Outside IR35 – this determination will directly affect the take home pay of the off-payroll workers performing those roles. It should be noted that existing roles which will run beyond 6 April 2020 will need to be assessed prior to 6 April 2020 in addition to all new roles commencing from 6 April 2020.

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BBC in IR35 Trouble

BBC IR35

Released yesterday (15th November), a report from the National Audit Office has stated that the BBC required some freelancers to operate through personal service companies (PSCs.)

Investigation into the BBC’s engagement with personal service companies reveals that the BBC has paid nearly £700 million into personal service companies set up by its presenters and other workers over the past few years.

The findings further emphasise the shambolic nature of the off-payroll IR35 rules as they currently stand. The legislation, in its current format, lets down contractors and freelancers as well as the public sector bodies which seek to engage their skills.

With the private sector rollout currently scheduled for April 2020, it would be sensible for the government to iron out the cumbersome barriers to correct IR35 implementation as soon as possible. If this doesn’t happen, the transition is likely to be mired in difficulty.

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Budget 2018: Kingsbridge Reaction

Budget 2018

Another year, another Budget. In recent times, contractors and the self-employed have become used to watching the Chancellor’s pronouncements from behind the sofa. It would be an understatement to say that the last few announcements weren’t particularly kind to the contracting community, so it was understandable if many approached this October’s Budget with trepidation.

Amid much rumour and speculation, there was uncertainty as to how the self-employed would fare this time around. Although many in the community were hoping that proposed private sector IR35 reform would be abandoned, in truth it was never likely to be an option.

Despite a plethora of evidence to the contrary, in recent months the government has gone to some lengths to praise the success of IR35 reform in the public sector. The real question was a simpler one: would similar reforms apply to the private sector from April 2019 or April 2020?

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Budget 2018: Contractor Preview

Budget 2018

Fright Night for Contractors and Freelancers?

It’s that time of the year again. No, not Halloween. The Budget. But that’s not to say that there won’t be a few scares in the Chancellor’s big red box come 29th October. So what might leave contractors and freelancers waking up in a cold sweat in the middle of the night this time around?

Firstly, the fact this year’s Budget is a little earlier than normal (it normally takes place in mid-to-late November) has set a few alarms bells ringing.

It could be nothing, and it may well be an attempt to get ‘distractions’ out of the way before pressing on with the real business of Brexit, but there is speculation that an early Budget date has been put in place in order to give the government time to perfect the launch of the heavily rumoured private sector IR35 reforms.

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It’s a good time to be a female IT contractor

Female Contractors

Last month, it was reported that the Nixon Williams report showed a surge in the number of female IT contractors – rising from 16,568 in 2016 to 20,648 in 2018. That’s a massive jump of 24.6%.

The same report also demonstrated that self-employment among IT professionals is also on the up, rising much more quickly than the numbers of permanent employees in the same sector. There was a 4.5% increase in the number of IT contractors, compared to just a 3.9% increase in the number of IT employees. That said, numbers for the latter are higher overall, with 701,000 employees versus 125,012 contractors.

It’s safe to assume that a big proportion of these new IT contractors are, in fact, women, suggesting it’s a great time for women to take the plunge into the self-employed life.

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Jaguar Land Rover: Brexit Threatens our Investment Plans for UK

Jaguar Land Rover Archery

In the latest sign that Brexit might upset the apple cart more than we’ve been led to believe, Jaguar Land Rover chief executive Ralf Speth today warned that a “bad” Brexit deal would have serious ramifications for the company’s £80bn investment plans for the UK.

Crucially, JLR is one of the single biggest employers of contractor workers in the country. The prospect of curtailing their UK operation as a result of Brexit, therefore, would have severe implications for a large number of contractors currently working there.

Though JLR, owned by India’s Tata Motors, have been at pains to state that their “heart and soul is in the UK” it noted that without frictionless trade its UK investment plans would be in “jeopardy”.

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‘Self-employed’ Hermes couriers entitled to workers rights, tribunal finds

Hermes Self-Employed

Hot on the heels of the landmark Supreme Court decision that classified a Pimlico Plumbers contractor as a worker, thereby allowing him access to working rights previously only accessible to the ‘traditionally’ employed, comes another ruling that could further blur the lines between workers and the self-employed.

Earlier this week an employment tribunal in Leeds ruled that a group of 65 Hermes couriers were entitled to employment rights, minimum wage and holiday pay. In what amounts to one of the most significant victories against what some have called the exploitation of gig economy workers, the couriers are also now able to reclaim unlawful deductions from their wages that had arisen as a result of their classification as self-employed.

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Missing something? Protect your pocket with our IR35 cover

IR35

We’re a bit like a nagging parent at Kingsbridge when it comes to IR35. Do your laces up. Eat your vegetables. Make sure you’ve got the right cover in place for you and your business.

But like a nagging parent, we only do it because we care. In recent years we’ve seen more and more drawn-out legal battles contesting IR35 decisions, and the outcomes are generally less than desirable. Whether it’s the fine itself, or simply the spectre of having to defend yourself against the government, finding yourself in an IR35 investigation can be stressful, costly, and time-consuming.

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News Round-Up: 15th June 2018

Contracting News

Although the decision around Pimlico Plumbers and the rights of gig economy workers is the most important contractor-related story to hit the news in the last few weeks, a few other items have certainly piqued our interest. From digital security breaches that highlight the importance of protecting data you hold to announcements of layoffs at some of the UK’s biggest manufacturers, there’s plenty to get your teeth into. Read on for more.

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