Don’t get caught out by AWR

AWR

The new Agency Workers Regulations (AWR) will come into force later this year and for those keen to be seen as outside the scope of the regulations focus will return to IR35 tests.

In the draft guidance “the definition of an agency worker excludes those who are in business on their own account”, but simply owning a Limited Company and putting your earnings through it will not be enough to put you beyond the scope of the regulations. Any dispute would require the worker to prove that their circumstances, arrangements and company set up genuinely support their self employed status.

A number of factors can be considered in this regard but it is likely that you will need to demonstrate a number of them to succeed in convincing HMRC. Contractors who take fiscal responsibility for any negligence in their advice and purchase appropriate business insurance will be seen as different to those choosing to rely on indemnity from the end client in the same way as an employee would.

Other factors which could be considered are the purchase of your own business equipment, computer hardware and software together with appropriate licences, personal protective clothing for site visits etc. In addition supporting your own professional development through training, or perhaps subscriptions for membership to a professional body in your chosen field.

All of these things are generally provided for employees but if you rely on them it could support the view that your status is only really in place for job flexibility or tax reasons and it would be likely to lead to additional scrutiny from HMRC.

IR35 Staying Put

IR35

Now it’s been decided that IR35 is here to stay, albeit with better management by HMRC, freelance contractors needs to refresh themselves with it, ensuring they are compliant.

Taking out Insurance for your limited company has always been a good indicator to HRMC of your independent status, and although you can buy the basic requirements to satisfy this element, you should also be thinking how best to cover your company for all eventualities.

Being comprehensively covered has to be the key for peace of mind, not just for you, but your client and agency as well. Kingsbridge Contractor Insurance offer a package, specifically designed for freelance contractors working through their own limited company or as a sole trader, and as experts in freelance insurance they have thought about claims coming from every angle. The package even includes a personal accident cover for occupational accidents providing you with weekly income should you be injured at work.

Richard Bell, director of Kingsbridge, says “as a freelance contractor you have to take responsibility for losses which arise from your errors, and relying on other parties to indemnify you for such loss can be seen as evidence that you are not in business in your own right. Why take this risk when affordable comprehensive cover is available, after all could you really afford the legal cost to defend a professional indemnity claim, even if the allegations are unfounded?