As we fast approach the 6th of April many companies and drivers are still not prepared for the coming changes to IR35. There is a lot of information out there and the response from some companies has been to bury their heads. Some take the attitude that the government will change it’s mind! The clear solution is to act now and be prepared.
So whats been happening
The scare stories and sales techniques being used to sell solutions has been hilarious, there isn’t a need to go into meltdown or put barriers up, all that’s needed is a bit of planning. All companies want to protect themselves from the adverse effects of the legislation. So HOW do companies ensure they meet the requirements of the changes? It’s easy when broken down.
Main points to ensure you meet compliance
- Make a list of the roles you put out to agencies and decide if these fall in or out of scope with IR35. This is known as CEST- check employment status for tax. This may vary from job to job
- Issue a SDS -Status Determination Statement to your suppliers
- Get a disclaimer from your supplier that the staff provided fall in line with IR35.
- Regularly check and update your disclaimer
- Check pay rates to charge rates if directing the role is PAYE (Hint charge rate must include holiday pay, pension and correct tax and NI charges, most agencies will show the breakdown if requested)
If you are still unsure or would like more information on IR35 please check the links at the bottom.
Drivers
If you are trading as a limited company then all is not lost either! quickest way is to work under PAYE when required and as a limited company when possible. If the tax office questions your claim to be a limited company there are steps you can use to build your legitimacy.
- Highlight the ways your work situation differs from an employee
- Keep client correspondence
- Don’t name your company after yourself
- Have your own Marketing materials (website listings, business cards etc)
- Maintain your own business office (this can be a room in your house)
- Take out your own business insurance
- Invest in your professional development(this differs from employees who have companies pay for training)
- Try to have multiple clients at the same time
Also see our IR35 Blog from last year!
https://www.gov.uk/guidance/understanding-off-payroll-working-ir35
https://www.unbiased.co.uk/news/accountant/IR35-tips-for-contractors-and-companies
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