IR35 Private Sector Reform
This page contains everything you will need to know when it comes to IR35 and the planned changes in the private sector, effective from 6th April 2020.
As part of the SThree group of companies, we have the experience and tools in place to help you navigate the complexities of IR35, having successfully supported the Off-Payroll reforms in the Public Sector in 2017. We ensured that all End Clients understood the process and their responsibilities, and that all workers were set up compliantly depending on their assignment determination.
What is IR35?
IR35 is tax legislation that is designed to combat tax avoidance by workers supplying their services to clients via an intermediary – Limited Company (Ltd) or Personal Service Company (PSC) – who would be classified as an employee if the intermediary was not used. These workers are called ‘disguised employees’ by Her Majesty’s Revenue and Customs (HMRC).
IR35 has been in existence since 2000. In 2017 the UK Government made changes specific to the Public Sector and now plan to roll out similar changes to the Private Sector in April 2020.
What is changing and what do I need to do as a client?
Until now, in the Private Sector, the contractor has been responsible for deciding if the IR35 rules apply or not, which has an impact on the way that they tax themselves. The change now requires the end client to make the decision on whether the IR35 rules apply to the assignment. This is known as being inside or outside IR35.
Check your Employment Status for Tax (CEST) using HMRC's tool!
It is important to start thinking about how to ensure you follow the rules compliantly. You should start to think about auditing your flexible workforce, begin understanding and making IR35 determinations, ensure all hiring managers are up to speed on the new rules and you are set up to continually attract flexible workers to your business.
Any contractors supplying services using an Umbrella Company do not fall into this legislation as they will already pay the relevant employment taxes. Here at Real Staffing, we have a compliant Umbrella Company Approved Supplier List and only trade with compliant companies to remove any risk from the supply chain, and protect our contractors, clients and ourselves. These approved Umbrella companies go through a full due diligence process and are all FCSA accredited.
How can we help?
As a compliant PLC with extensive experience in contract staffing and IR35 changes in the Public Sector, we have been through these changes before. We have a comprehensive understanding on how to protect and optimise your flexible workforce and have the contract models in place to support you as required.
