IR35: Myths and Reality
Thousands of self-employed workers will face the huge implications from April 2020 when the employment law changes. While the original reasoning behind it to crack down on the self-employed individuals operating through a company, it will affect these people significantly.
The IR35 changes mean that self-employed people who work for one company like an employee, have to pay the same level of tax if they were permanently employed. It’s estimated that it will generate at least additional £3 billion fort he government. One of the issues can be simply causing confusion with complicated new rules, making the self-employed individual suffer as a result.
The news has been generally met rather negatively, with various self-employed individuals claiming they will be hit hard. However it should be noted that the new rules apply to large companies. Smaller companies which have at least 2 of these 3 conditions are not affected:
- turnover of less than £10.2m a year
- balance sheet assets of less than £51m
- fewer than 50 employees
Otherwise, the larger clients should determine the employee’s or self-employed person’s status.
Contact us if you need any help, support or clarifications how the new rules affect you or contractors working with you, and meanwhile here is some guidance from HMRC how to prepare for changes to the off-payroll working rules (IR35)
Find more information about IR35 in general here or as always – contact us!