The HMRC introduced the IR35 legislation, known as the Off-Payroll Working Rules in 2000 to tackle ‘disguised’ employment; this was then amended in April 2017 in the public sector. From 6th April 2021, changes to the IR35 will apply to the private sector, rules impacting clients, recruitment agencies and contractors alike.
The new legislation assesses whether contractors are ‘actually’ employees when they take on work for clients and will ensure that everyone who does the same job in the same manner pays the correct income tax and NI contributions. Under the new legislation all assignments will be required to be assessed by the end-user client to determine if it sits ‘inside’ or ‘outside’.
Note: The Government has delayed private sector IR35 reform by 12 months, after pressure by peers – and the coronavirus. The date above is the new revised date.
A broad range of factors are considered in assessment, however the most important are:
Supervision, direction, and control: What degree of supervision, direction, and control does the client have over the contractor on a day to day work basis?
Substitution: Can the contractor send someone else in their place?
Mutuality of obligation: Is the client obliged to offer the contractor work, and are they obliged to accept it?
If an off-payroll contractor is determined to be inside IR35 then this will affect the contractors take home pay.
You may be affected if you are:
A worker who provides services through an intermediary
A client who receives services from a worker through an intermediary
As a contractor (off-payroll worker), and your assignment is determined to be inside IR35 then you are classed as an ‘employee’ and will be liable for income tax and NI contributions through your pay. If ‘outside IR35’ then this is not the case.
If you’re a firm or business that is affected by IR35 reforms and hires contractors (off-payroll workers), you’ll need to make sure you’re taking the correct steps when hiring and engaging contractors.
IR35 can seem complicated with so many considerations and assessments to be made. Don’t worry! By working with Marine Resources and our certified and approved payroll partners, we can remove the IR35 headache. There is no need to stop hiring contractors and no need to stop contracting.
Our approved payroll partners will become the ‘fee-payer’ and are therefore responsible for off-payroll contractors Income Tax & National Insurance contributions.
We can assist you with the following:
Client and Contractor advice
Provide certified and approved payroll companies to off-payroll workers
Payroll contractors in the most relevant manner depending on the assignment
Ensure assignments are assessed (SDS) correctly and fairly