IR35 reforms – what’s happening now?

IR35 reforms – what’s happening now?

Dec 11, 2018

It’s been a couple of months since the Government announced its intention to delay the introduction of IR35 reforms in the private sector until 2020. 

While there’s no immediate effect, allowing many to breathe a sigh of relief, there’s no getting away from the fact that the reforms are on the horizon. 

Fortunately, there’s now a little more time if you are affected to consider the impact and determine your route forward.  We are here to help.

A reminder of what’s changing

The new rules will mean that responsibility for determining IR35 status shifts from you as the contractor to the agency or end client.  It means that every business in the private sector which uses contractors would need to understand IR35 and how it applies to their workforce. The employer or ‘engager’ would need to assess whether their contract workers fall inside IR35.  At the moment, responsibility for compliance rests with the contractors and/or their employment agency.

Do you need to do anything now?

The right approach will vary from contractor to contractor and organisation to organisation.  However, there are some general rules that apply for all which we covered in our article ‘Will you be affected by IR35 changes?’.

In that article, our Director Paul McDonnell highlighted the importance of understanding the wording of your contract as, in some instances, it may be possible to resolve IR35 status through a simple amendment to contract terms with your end client or engager.

Where this isn’t possible it may be necessary to look at other options, which could include:

  • Continuing to work through your limited company but accepting that payments will be subject to PAYE/NIC and you will therefore have reduced take-home pay.
  • Seek to negotiate a higher rate of pay with your employer/recruitment agency.
  • Look at alternative working options such as joining an Umbrella

Keeping you informed

We are keeping a watching brief on the Government’s IR35 plans and will work with you as contractors as well as your employment agencies and engaging organisations, where relevant, to support compliance.

We will keep you updated with regular newsletter articles but if you have a specific question, please do get in touch with a member of our team on 01244 684700.

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