IR35 rules for off-payroll workers are changing from 6 April 2021. Our employment and tax lawyers can advise your business on whether the changes apply to you and what you need to do to stay compliant.
IR35 is a set of rules that apply to workers or contractors who work through an intermediary such as a personal service company (PSC). They make sure that workers who would be employees if they worked directly for the client pay the right amount of tax and national insurance.
Currently, the PSC is responsible for deciding if IR35 applies to these workers. From April 2021, this responsibility switches to the end client. The end client will also need to pay income tax and national insurance contributions for any workers that meet the criteria.
If your business uses off-payroll workers, the IR35 changes could mean significant risk and upheaval. You’ll need to review existing contracts and potentially renegotiate them. You’ll also need to develop processes for assessing employment status and communicating any changes to your workers.
It’s vital that you prepare quickly to make sure you stay compliant. It’s a tricky area of law with a risk of significant penalties from both Employment and Tax Tribunals if you get it wrong.
Our specialist IR35 team can take care of many of these time-consuming tasks so you can focus on making the right strategic decisions for your business. We’ll provide an in-depth review of your situation and pragmatic, commercially-minded advice that matches your business goals.
Comprising both tax and employment lawyers, our team offers the comprehensive support you need to manage IR35 changes with minimum disruption to your operations and finances. We also have a range of flexible funding options to suit businesses of all sizes, including a fixed-fee service.
Contact us online or call us on 0370 1500 100 today to learn more about how we can help your business.
Does IR35 Apply To My Business?
The new IR35 rules apply to any organisation in the private sector if they or their parent company meet two or more of these criteria:
- Annual turnover of more than £10.2 million
- Balance sheet total of more than £5.1 million
- More than 50 (full time equivalent) employees.
Whether your business needs to take action will depend on the exact nature of your relationship with your off-payroll workers or contractors. Our lawyers can review your contracts and working practices to advise which contractors IR35 applies to and how you should proceed.
How Should I Prepare For the IR35 Changes?
The IR35 changes could have a significant impact across your business, affecting existing contractors, future recruitment, and day-to-day working practices. You’ll need to consider a wide range of questions, including:
- Who in your organisation is responsible for managing IR35 risks?
- Whose employment status do you need to assess, and how will you do it?
- What’s the impact for recruitment, pay, and reward?
- How will you communicate any changes among your organisation and its contractors?
- How will you deal with any appeals to your changes?
- What’s more important – the way you work, or the contracts that facilitate it?
It’s a lot to get through in not much time. We have the resources on hand to help you answer these questions and more as quickly as possible. And we’ll help you put the solutions in place too.
How Can Irwin Mitchell Help?
We know that each business’s working practices are different and each organisation has a unique relationship with its workers. Our tax and employment lawyers are highly experienced across all industry sectors and can give you IR35 advice that’s tailored to your specific market situation.
- Review your contractor contracts and working practices for IR35 exposure and suggest changes if necessary
- Provide a traffic light report on working practices, explaining whether contractors are inside or outside IR35
- Provide template contracts and other documents (such as status determination statements) for contractors both inside and outside of IR35
- Train your team to understand the implications of IR35 and how it may affect recruitment and working practices
- Amend your current contract and advise on negotiating any changes
- Help you explore and consider any changes to your HR processes to best meet resourcing needs
- Manage regulatory investigations or enforcement.
You’ll have a dedicated team of tax and employment lawyers who’ll work closely with you to understand your business and how it works. You’ll get advice that doesn’t just manage IR35 risk but helps you achieve your long-term commercial goals.
You can also benefit from our flexible pricing options to help you get the legal support you need, including fixed or capped fees, retainers and banked hours.
Get in touch today to learn more.