New HMRC IR35 factsheet for contractors – what you need to know
With only weeks to go before the new rules for off-payroll working apply, HMRC has produced a new IR35 factsheet for contractors who are working through intermediaries.
What’s the full story?
If you provide your services to a client through an intermediary e.g. a company, and you would be an employee if you worked directly for the client, the off-payroll (IR35) rules apply.
These require you to account for PAYE tax and NI on fees you receive from the client.
But from 6 April 2020, if your client is a medium-sized or large business, it will be responsible for deciding if IR35 applies and if so will deduct the PAYE tax and NI before it pays your fees.
You as the contractor, don’t need to take any action in preparation for the changes.
However, it goes on to say that if you think you will be affected by the new rules you can ask each of your clients for Status Determination statement which will indicate if your client plans to apply the new rules, and their reasons.
If you disagree with your client’s determination, you are entitled to formally challenge it.
They are required to reply within 45 days which means time is short if you need to negotiate the terms of your work so that it’s not caught by the new rules.
Do you need any help understanding your status as a contractor under the new rules? Get in touch and we would be happy to advise you.