HMRC's new plan to prepare contractors for IR35 changes
With just a few months to go before major IR35 reforms take effect in the private sector, HMRC is launching a package of support to help contractors get ready for the changes.
The new measures include webinars for contractors and large and medium-sized businesses that will be affected by the changes. Demand for these sessions seems high after four original workshops filled up in four days. HMRC has since added more more sessions for contractors and businesses.
Contractors can also access a range of other resources, including:
- A flowchart to help contractors understand if they will be affected by the changes
- A brief factsheet detailing all of the most important information about the changes
What are the IR35 changes
IR35 rules relate to the tax status of contractors and apply to any contractor that works through their own limited company.
Currently, it’s up to the contractor to decide whether ‘off-payroll’ IR35 rules apply to their engagements. From April, however, this responsibility will pass to any large and medium-sized company that engages the contractor.
If the private sector engager decides that a contractor falls under the tax authority’s definition of ‘disguised employment’, the contractor will be taxed as if they are an employee of that company.
Miles Grady, Director of Umbrella.co.uk said: “We’re still seeing a good deal of IR35 uncertainty among employers, agencies and contractors. I think a lot of people could be in for a nasty shock as we get closer to the April deadline. With time running out, individuals and companies should seek professional advice as soon as possible and start putting contingencies in place.”
For contractors that are likely to be caught out by the IR35 rule changes, continuing through a limited company is not tax efficient. Affected limited company contractors have a number of alternative options, including using an umbrella company.
For more information about IR35 or using an umbrella company, please speak to a member of the team today. Call: 0800 121 6513.