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 contractors from 6 April 2020.
IR35 (which is part of the off payroll working rules) is a set of regulations that intends to combat tax avoidance by consultants who are providing a service to clients via a personal services company (PSC) and would be considered, for tax purposes, to be an employee of the end user company.
IR35 has often been criticised for being overly complex, disruptive to business and poorly executed by HMRC – in fact figures from 2017 show that the government department has lost 5 out of every 6 challenges to its IR35 related fines. In order to tackle the challenges associated with IR35, significant changes are being made in 2020 that will have a wide ranging impact both on end user companies and the consultants themselves.
B P Collins can help...
If you engage a consultant or currently provide your services as a consultant through a PSC, our clear advice is to act now to assess your engagements to see whether you fall within the rules.
For end user companies, B P Collins can provide an onsite audit of your arrangements and give you a view as to whether an engagements falls within the rules and whether your agreement with your contractors should be restructured. Failure to do this could result in substantial tax liabilities and penalties for consultants and, if not corrected by 6 April 2020, this liability could extend to the engaging company.
If you’re also unsure about whether the outcome of a CEST search is accurate and need an expert opinion, B P Collins can also help.
Please contact the team on 01753 279029 or email firstname.lastname@example.org for further advice.