IR35 changes were originally set to be introduced in April 2020 but they were delayed due to the impacts of COVID-19. IR35 is another name used for off-payroll working rules and is used by HM Revenue and Customs (HMRC) to evaluate if a contractor is genuine, rather than being used as a ‘disguised employee’ for tax paying purposes. Usually, contractors who undertake work through a limited company will get certain tax efficiencies, but they also do not standardly receive employee benefits such as holiday or sick pay.

“It would mean that medium to large sized businesses would be responsible for working out a contractor’s employment status, rather than the contractor themselves.

“Contractors should also be given the reasons behind the decision in what’s known as a Status Determination Statement, and have the right to dispute the decision if they disagree with it.

“However, it’s important to note that small businesses are exempt from the changes, and if a contractor works for one, the contractor would still be responsible for working out their own employment status.”

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IR35 CHANGES will occur despite some levels of resistance, as the Chancellor Rishi Sunak has seemingly pressed ahead, with no reference to the reforms in his Budget speech.

Learn more about IR35 and how Circle Protect could help your business in our FREE eBook

10 things you need to know NOW in preparation for IR35 reform

In this FREE eBook you’ll discover…The financial impact of IR35 on contractors. How you can minimise the impact of IR35 on your business. Protecting your existing contractors using Circle Protect.

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