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Will I be Affected by the IR35 changes?

  • Publish Date: Posted over 3 years ago
  • Author:by Lucy Jolley

With almost 16 years under our belt, we are pretty switched on when it comes to all things recruitment related. With this in mind, we wanted to reach out to you to let you know that our consultants are available for you to speak to should you have any queries about the forthcoming IR35 legislation, whether you are currently working through us or not.

I Currently Work in the Public Sector:

Don’t worry, everything will stay the same for you. These changes were made in 2017 for Public Sector contractors.

I Currently Work in the Private Sector:

You may be affected by this new legislation – read on, and please feel free to contact us with any questions.

What is IR35?

A recent survey with a sample of our candidates found that 46% of them were not aware of the imminent changes, and more than a third of those questioned are still unsure of what they are going to do moving forward, we wanted to straighten a few things out for you. IR35 is a term used to describe a set of tax legislations that are designed to combat tax avoidance by workers and the firms hiring them.

In April 2020, the somewhat controversial IR35 legislation will be rolled out into the Private Sector, effectively shifting the responsibility of determining the employment status of off-payroll workers onto the end client.

The legislation states that any contractors that are in fact ‘disguised employees’ should be subject to the same Income Tax and National Insurance Contributions (NICs) as regular employees and should not be able to access the benefits and tax breaks typically available to contractors working via their own Limited Company. In other words, the legislation ensures that if the relationship between the worker and the client would have been one of employment, if it wasn’t for the intermediary, the worker pays tax and NICs roughly equivalent to that of an employee.

How Will it Affect me?

If you are a Public Sector worker it won’t affect you at all.

If you are Private Sector worker, you MAY need to change the way you are paid (depending on how you are paid now): if you are simply paid into an Umbrella Company already you don’t need to do anything but we would advise that you speak to your Umbrella Company to ensure that your Tax and NI deductions are being made properly.  If you are paid into your own Limited Company, then you will need to make a change.

I am Currently Paid Through My Own Limited Company – What Should I Do?

Please give your consultant a call (you’ll find the Divisional phone numbers below) who will be more than happy to advise you on next steps but, in principal, you have the following options.

Deemed Payments – Our Payroll Division can work out your Tax and NI contributions and pay your Net Salary into your PSC (Personal Service Company) account. Have a look at our fact sheet here.

Umbrella Company - You can use an Umbrella Company who will process all of your pay for you, work out your Tax and NI contributions and pay it into your Personal Bank Account. To find out more about this, click here.

We recommend you take a look at these pages on the website that may answer any further questions you have:
Understanding Off Payroll Working

Tax and IR35

The sooner you take action to explore your options with your Recruitment Consultant, the less likely it is that you will have problems when the deadline is looming, so please contact us on:

Health Care - 01772 208 961
Criminal Justice - 01772 208 962
Mental Health - 01772 208 963
Social Work - 01772 208 964
Housing - 01772 208 966
Construction - 01772 208 967
Probation - 01772 208 968
Legal - 01772 208 969

We specialise in Legal, Healthcare, Housing, Social Work, Mental Health, Probation, Construction and Criminal Justice recruitment - if you are looking for staff or looking for work please call 01772 555 530 or register your interest here.

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