IR35 was introduced with the intention of ensuring that individuals operating via a personal service company (PSC), were paying the correct levels of income tax and national insurance, relative to their employment status.
The basis of the legislation is to assess the nature of the direct relationship between the end client and worker (removing any intermediaries).
Inside or outside?
Where an assignment is deemed ‘inside’ IR35, relevant tax deductions have to be made from the contractor’s pay.
Any assignment ‘outside’ IR35 is classed as a genuine contractor and is not subject to the same taxation as employees.
What is IR35?
IR35 reform in the public sector
IR35 reform announced in the private sector
IR35 draft legislation released
6th April 2020
IR35 private sector
Latest IR35 news
One of the key changes is that the responsibility of defining IR35 status will switch from the individual to you, the end client.
In April 2020, IR35 will come into effect in the private sector, directly impacting all companies who engage contract workers.
These changes will affect a large part of the private sector as the new legislation requires companies to define the IR35 status of their contractors. Businesses must perform a full review of their contingent workforce and assess each role individually or risk being in breach of ‘reasonable care’ imposed by the new rules.
The potential financial penalties can be significant if incorrect steps are implemented.
This is where we can help.
Morson, alongside our IR35 expert partners, are on hand to support companies who use contract resource to introduce robust process to ensure compliance or risk financial, legal and reputational damage. Contact us at IR35@morson.com to find out more about our services.
The end client will need to demonstrate that ‘reasonable care’ has been taken when making the decision.
Collectively and individually our team has a wealth of experience in dealing with IR35 matters across the public and private sector. Together we can help you undertake a full review of your contractual workforce, to ensure your business is prepared well in advance of the changes, contact the team at IR35@morson.com for more information.