Is your business ready for IR35 legislation in April?
What is IR35?
IR35 is a set of Tax Regulations that dramatically affect how PAYE and National Insurance is paid when it comes to off-payroll service providers (contractors).
HMRC makes assessments as to whether individuals providing off-payroll services would be classed as employees if they were contracted directly; this can be based on factors such as role responsibilities, behaviours and ability to substitute.
IR35 may allow HMRC to obtain payment from your organisation, and off-payroll service providers when an off-payroll worker is deemed to be an employee.
What impact does it have?
If HMRC rule that off-payroll service providers who are providing their services through a third-party organisation (contractors providing services through an Ltd Company) are providing services that are considered to be the same as those of an employee, the individuals may find themselves in breach of IR35.
As of April, next year individuals may not be able to be treated as independent contractors, and therefore, PAYE, NI, Pension, Regulations, and entitlements will be affected for both the organisation and the individual.
In short, businesses may have to pay the appropriate level of Tax, as though that individual is directly salaried.
Does it affect me?
It will.
IR35 legislation was rolled out across the Public Sector in 2017 and has been in operation for almost three years.
IR35 legislation is scheduled to be rolled out to the private sector in April 2020.
Is my business ready, and what can I do?
There is still time for you and your business to learn about the impact that IR35 can have on your business so that you can implement a strategy that will de-risk your organisation.
Using our Managed Service approach, Nimbus has successfully supported several Public Sector organisations to understand and manage their exposure to IR35.
If your organisation uses a contingent workforce within your IT department or throughout your organisation, please reach out, and we can discuss how we can help.
For more information, get in touch with Jack Hazell (jack.hazell@nimbusdti.co.uk) Director of Operations at Nimbus.
