IR35 - Two Letters & Two Numbers
IR35 - Two letters and Two numbers – you can’t have helped but hear them over the last 7 days.
Last Week’s Mini-Budget saw the UK government announce fundamental changes to IR35, repealing the previous IR35 reforms meaning so much for so many in the working world.
But what is it?
IR35 is another name for the off-payroll working rules. The term ‘IR35’ refers to the press release that originally announced the legislation back in 1999.
Self-employed IR35 rules are designed to work out whether a contractor is someone who’s genuinely self-employed rather than a ‘disguised’ employee - for the purposes of paying tax. That’s because contractors who set up and work through a limited company enjoy some tax efficiency. While they don’t usually get employee benefits (like holidays and sick pay) they have flexibility and control over their work.
Some contractors try to take advantage of this tax efficiency by appearing self-employed on the surface, when they’d actually be an employee were they not providing their services through their limited company (disguised employment) The off-payroll working rules are designed to tackle this, but they aren’t and haven’t been without their problems. From April 2023 the responsibility for the determination of IR35 (Inside or Outside) and the tax liability will be back with the contractor and away from the end client which has been the case.
Rather than take any risk and spend time worrying about your employment status - join E&P. It’s warmer ‘Inside’ anyway! We’ll look after everything for you, and you’ll become an employee from day one and reap all the fantastic benefits we have to offer.