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IR35 – How will this impact your business?

If you are a business who has a turnover £10.2 million and have over 50 employees then the rule changes will affect you.

You will need to carry out determination status checks on your Contractors to assess whether they fall within or outside the IR35 rules. From a commercial point of view you may also need to change the way you take on Contractors so as to ensure it remains cost effective.

HMRC challenges

Worth noting – there have already been cases in the Tax tribunal, from the public sector that deal with the application of IR35. To name a few Christa Ackroyd, Lorraine Kelly and Paul Hawksbee.

The primary issue with those cases was whether the contractor was an employee or not. At the time of writing HMRC have lost 9 out of 10 of those cases but have seen an upturn in fortune after succeeding with a case against three BBC presenters, reported in September 2019.

Preparing for the changes

We are advising our clients to consider the following steps to prepare for the changes:

1. Carry out an audit on existing contractors
2. Consider the governments guidance “check-employment status for tax tool” (CEST) and whether you need a more in-depth assessment to help determine employment or self employed status.
3. Review internal systems such as payroll, HR and on-boarding policies.
4. Plan for Contractor appeals to your determination status checks.

How we can assist

Through our expertise in the area we will be able to assist with your IR35 needs. This includes, but not limited to:

  • Assessment of employment status through the determination statement;
  • Advise on appeals of the determination statement from Contractors;
  • Fill the gaps with the CEST tool;
  • Review and audit of existing contracts with contractors.

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