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Quick Guide to IR35 Reform for Recruiters

 

What is IR35?

IR35 legislation stops so-called “disguised employees” avoiding tax by working through an intermediary, like their own limited company. Contractors who are  “inside” IR35 pay roughly the same tax as employees. 

How to help your clients assess IR35 status correctly: download our FREE guide!>>

 

IR35

What's changing in April 2021?

At the moment, private-sector contractors determine their own IR35 status. From 6th April 2021, this responsibility passes to the end client. The legislation is not changing, so those who are genuinely outside IR35 now should still be outside after April,  assuming the client assesses their status correctly

How does this affect your contractors?

Where the client finds the contractor to be outside IR35, it’s business as usual and the you can continue to make gross payments to the contractor’s limited company.

Where the contractor is found to be inside IR35 PAYE tax and NICs, must be paid.and as a result they can expect a descrease in their take-home pay. Umbrella employment is usually the best solution in this circumstance. 

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How does this affect your clients? 

Your clients will need to determine the IR35 status of every contractor they engage. Blanket decisions can unnecessarily increase costs, so individual assessments are a better strategy. Most clients will need expert help to set up the necessary systems and processes.

How does this affect you? 

Your clients and contractors will naturally look to you for advice, and it’s important that you can answer their questions and advise them correctly.  You may need to arrange training to ensure this. 

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Contact our expert team on 01296 468 483 or email info@orangegenie.com 

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