With IR35 less than 3 months away, it's important that you do everything you can now to ensure you are prepared and compliant. Whether you’re a contract worker, permanent staff member or an employer, the April changes will cause be changes within the construction industry.
What does IR35 stand for?
IR35 is an acronym for Inland (I) Revenue (R) and 35 denotes the press release issue number 35 after it featured in Gordon Brown’s 1999 Pre-Budget speech over 20 years ago.
IR35 governs the tax status of an individual working as a contractor or freelancer and whether, for taxation purposes, they ought to be deemed an employee on payroll. Originally set to come into effect from April 2020, the implementation of IR35 legislation changes was postponed until 6 April this year because of the coronavirus pandemic.
Who does IR35 apply to?
The changes mean that medium and large businesses in the UK will be responsible for determining whether IR35 rules apply to those working for them as contractors, whereas previously the individual contractor was responsible for making this decision.
It is certainly a hot topic in the construction industry as we saw when a series of interactive webinars planned by HMRC, designed to bring construction firms up to date with looming IR35 tax changes, were fully booked within hours of their launch. The construction industry, and many other sectors, had hoped the new rules would be delayed again when the UK entered its most recent lockdown but those hopes were dashed by HMRC with the roll out of the webinars.
HMRC said: “We want to make sure people in construction are aware of their obligations so are providing support and education for businesses and individuals in the run up to changes.”
What if IR35 isn’t adhered to?
Non-compliance with IR35 will result in financial penalties, which underscores the urgent need for employers in construction to understand and implement the government’s guidance. In a busy period for the construction industry where Brexit is changing working patterns and reverse charge VAT changes are expected, it’s important that the IR35 ball isn’t dropped.
What IR35 help is out there for hiring managers?
We have created an IR35 Hub which will give you access to:
· Designated IR35 Account Manager
· Free SDS tool access
· Free webinars and training
· 360 support in assessing the best options for your business
If you want more information about how our solutions can help support your IR35 strategy, please get in touch.
