As a recruiter, you must understand IR35 legislation and how it applies to contractors working on temporary assignments. In this article, we explain what IR35 is and how it impacts recruitment agencies, contractors and end clients.
Chancellor Jeremy Hunt has announced that the Government will reverse almost all of the tax measures announced in the mini-budget that have not yet been legislated. Continue reading to discover the key announcements and find out what is changing.
In a surprising yet welcomed announcement, Chancellor Kwasi Kwarteng has pledged to simplify IR35 rules for contractors in the UK. From April 2023, off-payroll working rules introduced in 2017 and 2021 will be scrapped, and workers will again be responsible for deciding their employment status.
Two government departments have recently unveiled they face a combined tax bill of over £120 million due to IR35 status errors. The Department for Environment, Food & Rural Affairs (Defra) and the Ministry of Justice (MoJ) used CEST, the government’s IR35 status tool, to determine the IR35 status of their temporary workforce. Unfortunately, the tool appears to have failed. Keep reading, and we will explain why Defra and the MoJ face such heavy tax bills from the government.
The Loose Women host was facing an estimated £124,000 tax bill for contracts held with the BBC between 2015 and 2017, with HMRC arguing that Adams was not a freelancer and should have been operating inside IR35. However, the Upper Tier Tribunal upheld the original decision, made by the First-Tier Tribunal in 2019, which found Adams to be working outside of IR35.
The much-debated changes to off-payroll in the private sector (IR35) are coming into effect in April 2021. As a result, private sector organisations should already have reliable procedures to ensure each member of their temporary workforce receives a fair IR35 status assessment. This article will set out to answer the question – what should private sector organisations already have done to prepare for changes to off-payroll legislation (IR35)?
Having been delayed for 12 months in response to the coronavirus pandemic, changes to off-payroll in the private sector (IR35) will be coming into effect in April 2021. This doesn’t mean the end of contracting through a limited company in the private sector. However, it does mean that contractors with a personal service company (PSC) will no longer be able to determine their IR35 status. Instead, it’ll become the end-clients responsibility (if they’re classified as a medium or large sized organisation). Keep reading and find out more about how the upcoming changes to off-payroll in the private sector (IR35) will impact limited company contractors.
Last year, a first-tier tribunal went in favour of Talksport presenter and comedian Paul Hawksbee. It was found that Paul and his personal service company (PSC) Kickabout Productions Ltd were operating compliantly and outside IR35. Interestingly, it wasn’t the first time HMRC had lost a case regarding IR35, and it looked as if they were continuing to lose credibility on the legislation and their understanding of how it applies in practice. After an appeal from HMRC, an upper tribunal ruled in favour of HMRC – almost 12 months after the original ruling. As a result, Paul Hawksbee faces a tax bill of nearly £140,000.
If we rewind to 17th March this year, the Government announced they would be delaying off-payroll (IR35) in the private sector by 12 months. However, despite the delay, they have faced much scrutiny from professional bodies, temporary workers and employment agencies – because they all believe the legislation should be overhauled, or scrapped entirely.
On Tuesday 17th March, the government announced they were delaying the IR35 private sector reform from April 2020, to April 2021. Although this is good news for genuine contractors, it doesn’t necessarily mean much will change over the next 12 months. Here is what the delay to off-payroll in the private sector will mean for contractors and freelancers in the UK.
