Whether you are a freelancer, contractor or looking to change career paths, a topic that you can’t avoid is IR35. It has been around for years but from April 2020 the government is changing IR35 (Off Payroll Working) in a way that could significantly affect the way you are taxed.
The difference under the revised IR35 legislation is that in most cases the client, not the contractor will make the decision as to whether said contractor is ‘inside’ or ‘outside’ IR35. As some of you may be aware, IR35 is already in place in the public sector but is now being extended to all large and medium sized companies so that most contractors will have their IR35 status decision made by the client rather than by themselves. When working for clients that are small companies the decision will still be made by the contractor.
The financial affect may be significant for some freelancers and contractors who work via an intermediary, usually their own limited company or service company, where the clients’ interpretation of their status under IR35 is different to their own. Under the revised IR35 legislation whether you are inside or outside IR35 may be different depending on the client, but it will no longer be up to you to decide.
Further information on the scope and impact of IR35 can be found at https://www.gov.uk/topic/business-tax/ir35
Our HR & Compliance team at FS1 Recruitment are prepared for the IR35 legislation to come in place and will be in contact with our clients to assist with any questions. For support or questions on IR35, book an appointment with a member of the team, contact us on 01908 787560 or email@example.com