IR35 Advice
those changes. We give the advice that allows your business to continue using the skills independent consultants provide.
Keep attracting the best independent contractors to maintain your competitive edge, without exposing your business to a tax risk. Surveys show that most contractors will refuse to work for clients “inside IR35”.
Caselaw says no tickbox exercise can solve the IR35 problem. We can guide you by applying the same methodology the tribunals use to determine IR35 status.
As a recruitment agency or payroll provider, contractors and clients look to you to steer them through IR35 and related issues. Your reputation hangs on the confidence you can give.
How will IR35 change and how does it affect me?
HMRC are recently highly focused on this area, bringing more claims to the first-tier tribunal than we have ever seen before in twenty or so years that IR35 has been around.
Worse still for the risk-aware business, HMRC are winning some of these cases. Your business could be liable for any liability.
Rightly or wrongly, HMRC see massive non-compliance and believe that the majority of independent contractors and consultants are really employed.
Given how the sector developed, this is not surprising. For as long as it was down to the consultant to review the status of her own business and file returns to HMRC accordingly, complacency crept in:
Independent consultants sought work through employment agencies, because this was the best way to get work;
Clients advertised for ‘roles’; and
Agencies asked for ‘CV’s’ and talked about ‘salaries’.
You can see how it looked to HMRC.
With the exception of small private client businesses, HMRC’s legislative changes now require the client to make a declaration on whether the legislation applies, with tax consequences for them for not exercising sufficient care around IR35 legislation.
Many client businesses decided to never use independent contractors again. Others pushed them all toward umbrella employment. In response, large numbers of contractors (up to 75% in one survey) said they would not provide independent services again.
That is a lost opportunity on both sides.
Either your business loses a highly skilled, independent and flexible resource or pays a lot more for those skills, through all the costs of employment.
The irony is that the client’s declaration on engagement status does not determine whether the legislation actually applies: the criteria in the legislation have not changed and they do not refer to the client’s declaration.
To keep your competitive edge, speak to us for expert IR35 advice.
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