Our employment law team have considerable experience in advising on IR35.
Private sector firms will have to take responsibility for confirming the true status of their relationships with consultants from 6 April 2021, this introduction having been delayed by a year due to the financial impact of the pandemic.
IR35 (also known as the “off-payroll working rules”) is a set of regulations that are intended to make sure that employment taxes are paid where a consultant provides their services via an intermediary (usually their own personal services company) and is considered, for tax purposes, to be an employee of the end user business.
The existing rules have often been criticised for being overly complex, disruptive to business and poorly executed by HMRC – in fact, records show that the government department often loses the challenges to its related fines. To tackle those challenges, significant changes are being made in 2021 that will have a wide-ranging impact both on end user businesses and the consultants themselves.
B P Collins can help...
If you engage a consultant or currently provide your services as a consultant through an intermediary (such as your own personal services company), our clear advice is to act now to assess your engagements to see whether you fall within the rules.
For end user businesses, B P Collins can provide an onsite audit of your arrangements and give you a view as to whether an engagement falls within the rules and whether your agreement with your consultants should be restructured. Failure to do this could result in substantial tax liabilities and penalties for consultants and, if not corrected by 6 April 2021, this liability could extend to the end user business.
If you are also unsure about making a CEST Application or are considering a CEST Outcome and need an expert opinion, B P Collins can also help.
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