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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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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IR35 Trouble? We’ve got the cover for you

IR35

Regular readers of this blog will know that we’ve covered IR35 fairly extensively in the recent past. Whether we’re talking about the ins and outs of what it actually is or highlighting examples of contractors who’ve fallen foul of the legislation, we like to think of it as a subject we know well.

But there’s only so much talking we can do. Sometimes action has to be taken. That’s why we’ve recently introduced our Legal Expenses Plus policy, our cover designed to help you should you find yourself in the midst of an IR35 investigation.

An IR35 investigation is not something any contractor wants on their plate. Regardless of whether you’re found to be inside IR35 or not, it’s time consuming, stressful, and a likely drain on finances given the amount of effort you’ll have to put into defending yourself.

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IR35 IRL – How much will getting caught cost you?

IR35

There was a time when IR35 was something of a bogeyman to contractors. Tall tales and horror stories. Lurking in the shadows. A looming spectre, but never quite tangible enough to make you feel its presence. Those days are over. Gone are the 1 in 60,000 odds of being caught.

In the last 18 months or so HMRC has ramped up its campaign to catch contractors working as disguised employees and therefore inside IR35. Need more proof? We’ve rounded up a few of the more prominent cases below.

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Everything a Contractor Needs to Know About IR35

IR35

IR35. Two letters. Two numbers. It might not seem like much, but it should be at the forefront of any contractor’s thoughts. Not understanding the implications of IR35 could be the difference between a trouble-free working existence and a huge, potentially business-ending, fine.

If you work in the public sector there’s a good chance you’ve already felt the sting of the recent reforms which have left independent workers at the likes of the NHS and BBC up in arms at their treatment.

Unfortunately, there’s a very good chance that the same reforms will roll out to the private sector in the near future, after an upcoming consultation due to be released this year. Given how prevalent the legislation is likely to become, it’s important that contractors make sure they know as much as possible.

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Government announces consultation around private sector IR35 reform

Private Sector IR35

With a certain sense of inevitability, on 18th May the government announced their intention to carry out a consultation on tax avoidance in the private sector.

Any of those in the contracting community with even a passing interest in IR35 legislation will have known this was coming, the question having always been ‘when?’ rather than ‘if’. But what impact is it likely to have going forward?

When announcing the consultation period, the government were at pains to point out that “no decisions have been made” in terms of rolling out IR35 reform into the private sector and made it clear that they were actively seeking opinion on how the rules around the controversial legislation can be improved.

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