IR35, Consultants and Independent Workers
The so called “IR35” regime became law in 1999. It’s purpose was to prevent large-scale tax avoidance when people work are engaged to work for end-users via a personal service company (PSC) or other intermediary (such as an employment agency) in circumstances where that person would otherwise be regarded as the end user’s employees or workers.
In April 2021, the IR35 laws applicable to the private sector took a giant step forward to ensure that the rules had greater force. The changes have had a seismic impact on the consultancy and contractor world. Businesses that ‘get it wrong’ face massive fines and penalties.
With the exception of small businesses, end-user clients or other ‘fee-payers’ of individual contractors will have to do something they have not legally been required to do before: undertake detailed assessments to determine whether each contractor is caught by IR35 and so, in turn, should be taxed by them as if they were an employee.
Will has guided countless businesses through the IR35 maze, helping some adapt their entire business model to ensure that they do not fall foul of the rules and end up on the wrong side of a costly HMRC investigation or adverse tax assessment.
If you engage contractors via intermediaries and are unsure whether your business is complying with the law and is adequately protected, speak with Will. He will be pleased to help you.