Are you going to face an IR35 bill from HMRC this year?
It’s a question on the minds of many in business after the weird last 18 months of UK politics - especially those who work as contractors, sole traders, or micro consulting businesses to larger firms and the Government. Remarkably, if you are on the other side of the page and hire contractors directly, it’s probably you that needs to take more heed of IR35 compliance.
Should you be concerned?
If you don’t know the story so far…
IR35 (Off Payroll) refers to the UK’s anti-avoidance tax legislation designed to tax external workers that are doing a similar job to an employee, at a rate like an employee. The rules apply when a worker provides their services to a client through an intermediary but would be classed as an employee if they were contracted directly. The legislation has increasingly directed its focus towards placing the responsibility for correct classification onto the customer of external workers and small employers.
If the correct classification is not applied, HMRC can (and say they will) penalise the customer directly, and not the worker.
The good news, if you’re not up to speed on your IR35 compliance position (or risk), I bumped into Michael Cleavey of CoComply last week. The company provides a fully outsourced IR35 compliance service that has a cleverly constructed ratchet pricing structure to keep it affordable for both small providers and large consumers of external workforce talent.
As it turns out, Michael was interviewed recently by Scott Wilson of AVENT. In the discussion, the essentials of IR35 compliance are covered in detail for those of us not too familiar with the detail!
You find the full Q&A session here:
Additionally, CoComply has put together a simple FREE online scorecard to help companies quickly assess the level of IR35 compliance risk they are presently taking.
You can find the scorecard here.
About the Author
Ian Tomlin is a seasoned marketer, entrepreneur, and business leader with a 30+ year career at the intersection of strategy, technology, and marketing. As the founder of successful businesses, including Newton Day Ltd, Ian brings a wealth of expertise in guiding companies toward compelling brand stories. Reach out to Ian via LinkedIn to transform your marketing approach and tell your brand story effectively.
