The IR35 clock is counting down its last days! From 6 April 2021, IR35 will now apply to organisations (over a certain size) in the private sector.
IR35 is the mechanism HRMC introduced to close down a loophole that was costing millions in terms of unpaid PAYE and National Insurance payments. The loophole looks something like this; where individuals contract themselves out to a client through a personal service company or other intermediary but act, and are treated as an employee of that client, the latter avoids paying PAYE and national insurance contributions, and the individual is paid through dividends from their company.
From 6 April, all private companies (barring small businesses) will be required by HMRC to assess whether IR35 applies in any such business relationship i.e. whether PAYE and national insurance is payable. Prior to this, the onus has fallen on the intermediary themselves. This led to high profile cases concerning TV presenters such as Lorraine Kelly. HMRC went after Ms Kelly's personal service company for unpaid tax arguing that she was, to all intent and purpose employed by GMB despite the existence of her personal service company. As such, it alleged she owed unpaid tax and national insurance on her earnings.
Hannah Bollard from our employment and pensions team has recorded a webinar on this topic which captures the essential aspects of IR35 in a practical and concise manner. Designed to inform and equip, it will help understand the reasoning behind the change, the technical implications and the steps to put in place for now and going forward. Do click on the link for access to this webinar.
Wherever you are in your preparations for this change, this webinar will lighten the load. Informative and practical, it recaps on the background, the purpose and the ramifications of IR35 and then provides practical answers to frequently asked questions.