IR35 Articles

Limited Company Contracting in 2021/22? Time for a Rethink

Are you a contractor? Are you planning to work through your own limited company in the new tax year? New IR35 rules could mean that it’s time to rethink the ltd way of working.

Changes to off-payroll working (IR35) rules mean that contractors are more likely to be caught out. From the start of the 2021/22 tax year, private sector clients will be responsible for judging a contractor’s IR35 status for the first time.

Budget 2021: End of the road for inside IR35 contractors

A small cohort of limited company contractors had been holding onto hope that the Chancellor would use his recent Budget statement to once again delay a set of damaging IR35 reforms.

IR35 changes were originally due to be implemented in April 2020, but coronavirus-related disruption pushed the reforms back until April 6 2021.

Challenges and opportunities for umbrella workers in 2021

Last year was a challenging year for almost everyone in the UK, including umbrella workers. Many of these challenges are likely to continue this year, but there will also be opportunities for umbrella workers to prosper in 2021.

In this article, we look at some of the most important challenges and opportunities facing umbrella workers this year.

HMRC's new plan to prepare contractors for IR35 changes
marketing | 19 January 2021
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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.

HMRC’s IR35 Checker Can’t Decide on 20% of Cases
marketing | 17 December 2020
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HMRC’s controversial ‘Check Employment Status for Tax’ (CEST) tool is unable to provide an IR35 status for one-in-five contractor queries. 

With a few months to go before IR35 rule changes are applied to contractors in the private sector, HMRC data shows that their online IR35 checking tool was used almost a million times in the last year.

Of the 975,416 online checks completed, the tax authority found that 505,598 (52%) were deemed outside IR35, 281,099 (29%) were classed as inside IR35 and 188,719 (19%) were undetermined, meaning the tool could not provide a definitive answer.

How to choose a compliant umbrella company
marketing | 26 March 2021
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Stricter IR35 rules mean that many limited company contractors are looking to switch to an umbrella working model.

Joining an umbrella company means that you pay tax at the same level as an ‘inside IR35’ limited company contractor, while also benefiting from holiday and sick pay entitlement.

When you choose an umbrella company, it’s imperative that you choose a compliant provider. Not doing your research at an early stage could cost you in the long run.

Umbrella compliance has hit headlines recently after HMRC warned contractors about a number of schemes offering higher than average rates of take home pay.

IR35 for tech contractors: What you need to know

Highly skilled contractors working in software development, IT project management and many other roles in technology are among those most at risk from changes to IR35 rules.

 

Although these roles tend to be well paid, the contracts are often structured in a way that means they fall ‘inside IR35’.

In this brief guide, we aim to answer the most important questions about IR35 to help you better understand the rules, how they might be applied and how you can avoid paying more in tax.

What does ‘inside IR35’ mean for contractors?
marketing | 27 January 2021
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With changes to off-payroll working rules imminent, experts predict a tidal wave of new ‘inside IR35’ judgements in the next few months. 

If you are a contractor working through your own limited company then you are at risk of being judged ‘inside IR35’ - but what does this mean for you and your bank account?

With changes to off-payroll working rules imminent, experts predict a tidal wave of new ‘inside IR35’ judgements in the next few months. 

If you are a contractor working through your own limited company then you are at risk of being judged ‘inside IR35’ - but what does this mean for you and your bank account?

Contractor guide: Moving from a limited company to umbrella model in 2021
marketing | 11 January 2021
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Many contractors are likely to close their limited companies this year and subscribe to an umbrella company to try and avoid punitive new IR35 rules.

For the most part, limited company contractors love the tax advantages and the autonomy that comes with running their own personal service company (PSC). But a major shift in the way that IR35 legislation is applied in the private sector could lock thousands of contractors into high-tax, low-benefit arrangements.

If you tend to work very closely with your private sector clients and are at risk of being trapped in an ‘inside IR35’ contract, then switching to an umbrella company model of working could be the best move you make in 2021.

HMRC: Don’t be hoodwinked by high take-home pay
marketing | 8 December 2020
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HMRC has warned contractors not to be fooled by unlawful tax and umbrella schemes advertising unusually high rates of take home pay.

As the deadline for sweeping IR35 reforms in the private sector draws closer, HMRC has launched a new campaign against tax avoidance and ‘dodgy’ umbrella schemes.

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