The IR35 tax legislation was introduced as a means of distinguishing between employees and self-employed contractors. Here are a few tips to help you navigate the changes set to be implemented in the private sector from 6th April 2021.
It is a good idea to start preparing for the new legislation by assessing your contractor base. We have developed a comprehensive tool under the guidance of a leading provider to help engagers assess their workers' status and determine next steps regarding employment and procedure going forward. You should do this on a case-by-case basis and not take a 'blanket approach' if you have numerous contractors.
How we help you
La Fosse are committed to:
Partnering with our current clients to assess contractors using our bespoke tool
Offering solutions for contractors deemed to be inside IR35
Supporting you so you have a compliant supply chain
Advising on best practice
Educating the hiring community
What happens after April 2021?
Given the reliance of many businesses on contractors, when you're giving the agency the job specification, it will be your responsibility to inform them whether the role sits inside or outside IR35 legislation.
After 6th April 2021, you will need to assess any new contractor you wish to bring on by answering a series of questions regarding their working practices. Please answer honestly and accurately. It is also advisable to begin assessing any current contractors you have that will still be on site after April 2021.
Is your business exempt?
The Government has stated that it intends to use 'similar criteria' as those found in the Companies Act 2006 to define a small business. If this is the case, responsibility for determining the IR35 status of a contract remains with the PSC and the changes do not apply.
The Act says that a company will be regarded as small if it has two or more of the following features:
Turnover of £10.2m or less
£5.1m or less on its balance sheet
50 employees or less
How La Fosse can help...
If you would like to get in touch regarding further advice on IR35 and how it may affect current or future contractors, please contact your relevant consultant or Katherine via the below channels:
For more information on IR35, follow the links below: