Under the current IR35 rules, contractors are responsible for determining their own IR35 status and the risk of non-compliance lies with them and not their customer.
However from April 2020, with the exception of working for small companies, the legislation puts the burden of responsibility on the customer that pays the contractor.
If a customer decides IR35 does apply, the contractor business will be taxed at source exactly as if it were an employee. Although contractors impacted by this measure may have to pay tax like an employee, their employment status will not change, so they will not receive the rights and benefits that go with employment.
Not a great outcome for contractors who benefit from the scheme and one where specialist advice is needed but where taking simple steps now may reduce the risk to you in the future
– speak to your customer and see how they plan to review your IR35 status
– have your contracts reviewed by an IR35 specialist
– demonstrate that you are a legitimate business by having an office address, website, business insurance etc
-show that your are independent from your customer in that they don’t have to offer you work and if they do, then you don’t have to take it and that you aren’t under their control
– speak to your customer and get their agreement over your IR35 status in writing
At Harrisons Business Rescue we can help you obtain correct specialist for your situation so that you are able to develop a plan of action to limit the impact on you in April 2020
