From 6th April 2020, IR35 will be implemented. This new legislation is set to impact around 900,000 UK-based limited company contractors in the private sector.
Amongst the concern of retaining their contractor status, many contractors are worried about how to mitigate their risk around these changes.
Without being fully compliant, many consultants are at risk of being investigated by the HMRC. At Procorre, we help consultants within our network to become fully compliant with the legislative changes, through comprehensive support services which allow them to retain their contracting status.
1. What are client's IR35 plans?
The latest developments to IR35 mean more responsibility has shifted onto the employers. Therefore, it’s important to speak to your client(s) and find out their IR35 plan as soon as you can. Both parties could end up with a backdated tax bill for the previous time the contractor has been working, if the self-employed workforce are made to become PAYE employees.
2. Whose equipment do you use?
You are more likely to fall outside of employee status if you are using your own computer and equipment when working on your projects. This is because under IR35, this is deemed an employee benefit.
3. Do you have control over your contract?
When it comes to the working relationship between clients and contractors, IR35 means there will be more stringent measures looking at how much control the client has over your contract. If your client is picking the hours, days and locations of your contract, then you are more likely to fall under employment status.
4. Are you working on more than one contract?
If you are working on a single contract, it is best to consider looking for other opportunities as invoicing multiple clients throughout the tax year will help you to maintain your contractor status and independence.
5. Do you collaborating with others?
Did you know collaborating with others you will help retain your status as you will be considered a business entity? This is the perfect opportunity if you’re a freelancer and want to grow your team. By bringing in more skills, you can help retain flexibility for yourself, whist growing your income.
6. Where are you based at work?
If you are spending more time based in an office with your client, then under IR35 you are more likely to be deemed an employee. If you have more than one client, it is a good idea to work remotely or move offices from time to time.
As part of our support packages for consultants, we provide a comprehensive IR35 risk assessment which helps identify where you fall foul and the steps you can take to become compliant.
After your assessment through Procorre, you can receive your IR35 compliance certificate and ensure the retention of your independent status as you continue working on new contracts and projects globally. Learn more about our services here.