ENSURE IR35 COMPLIANCE
As of April 2022, HMRC's IR35 grace period ended.
Organisations are now fully liable and responsible for any inaccuracies in their determinations. Our IR35 Health Check MOT service supports businesses to avoid the financial and reputational risks associated with not meeting IR35 regulations.
When the IR35 reform was enforced in April 2021, HMRC announced it would offer organisations a grace period to ensure their determinations were completed accurately. As of April 2022, the aforementioned grace period ended, meaning organisations are now fully liable and responsible for any inaccuracies in their determinations and could be subjected to HMRC investigation at any time.
Our IR35 Health Check MOT service supports businesses with contingent workforces of all sizes to ensure their IR35 solution and/or determinations are correct and secure to avoid the financial and reputational risks associated with not meeting IR35 regulations. Our service is fully insured against the outcome, backed by employment law experts.
IR35 LEGISLATION RECAP
After a 12-month delay IR35 ‘off-payroll’ legislation came into play on 6 April 2021
IR35 was introduced to ensure that individuals operating via a personal service company (PSC) were paying the correct levels of income tax and national insurance contributions, relative to their employment status.
WHAT DID IR35 CHANGE
From April 6th 2021, the responsibility for determining the correct IR35 status of contractors switched from the individual contractor to the end client. Businesses must ensure they are delivering correct determinations taking reasonable care in doing so.
HOW DID THIS AFFECT ORGANISATIONS
Organisations were required to undertake a full review of their workforce to correctly define the IR35 status of their entire LTD contractor population to ensure compliance with Government legislation.
INSIDE OR OUTSIDE
Where an assignment is determined ‘inside’ IR35, relevant tax and national insurance deductions must be made from the contractor’s pay at source by the fee payer. Any assignment determined ‘outside’ IR35 indicates a true business relationship and contractors can continue to manage their own tax affairs.
WHAT ARE THE KEY CONSIDERATIONS?
The end client is responsible for determining whether a contractor is ‘inside’ or ‘outside’ of IR35. Organisations must ensure that their business is delivering correct determinations or risk significant financial implications for incorrect determinations.