Supporting our candidates and clients with IR35
IR35 OVERVIEW ///
IR35, also known as the Intermediaries Legislation, is tax legislation aimed at tackling tax avoidance. The legislation is designed to test whether workers providing their services and expertise to a client via an intermediary - such as a limited company or personal service company (PSC) - would otherwise be an employee of the client if the intermediary did not exist. If caught by the IR35 legislation, the earnings of “deemed employees”, as HMRC refers to them, are subject to employment levels of income tax and National Insurance Contributions (NIC’s).
It is the clients’ (the company utilising the worker) responsibility to determine whether a contractor operates inside or outside of IR35 if that client meets the qualifying criteria of (a) having a UK presence, and (b) being classed as a medium or large sized business.
HMRC guidelines state that the engager must take ‘reasonable care’ in how they go about making the determination, and the determination must be communicated to the next party in the supply chain in the form of a Status Determination Statement (SDS).
Engagers must ensure that each contract assignment is robustly assessed. Making a catch-all decision that all assignments are inside IR35, commonly known as a blanket determination, is not considered ‘reasonable care’ by HMRC. Failing to make a determination is also unacceptable in the eyes of HMRC.
Proper IR35 compliance is a complex and ongoing process and should form part of the clients’ business-as-usual activities. Therefore, clients should regularly review their compliance processes to make sure that they remain fit for purpose.
Uniting People has a close working relationship with a specialist IR35 consultancy that focuses on delivering ‘best in class’ support to end clients on matters of compliance. Their services enable end clients to:
Uniting People would be happy to connect you with our partners in order to discuss the services in more detail.