Job Type
Use Ctrl (Command on Mac) to Select Multiple

IR35 reform series pt.1 - what does it all mean?

IR35. Since the announcement that IR35 regulations would be extended to the private sector in April 2020, we’ve received a mixed batch of feedback from contractors and clients alike. Whilst various resources are available for IR35 information and help, there is still a knowledge gap and a tremendous amount of confusion… which ultimately could see many contractors and companies risk non-compliance next year!

Caspian One has teamed up with leading contractor insurance firm Qdos Contractor, in an effort to combine our unique insights and bring you the latest and most relevant information on IR35… specific to the people and companies we assist.

In the first part of our new IR35 series, we answer the most common question we keep hearing…

“What actually is IR35, and what does it all mean to me?”

To ensure you don’t miss the next parts in our IR35 series, subscribe to our knowledge hub using the form on the right-hand side or alternatively, follow our LinkedIn company page HERE

The facts then. When IR35 reforms take effect in 2020 medium and large companies in the private sector will become responsible for setting the IR35 status of workers. Additionally, they will become financially liable should HMRC deem they have made any incorrect assessments. These changes will be enforced from April 6th next year and will be similar to those introduced in the public sector in 2017. 

Contractors will no longer have the power to decide whether they belong inside or outside IR35 - It will be their end-client that makes this decision…  effectively setting the tax status of the contractors they engage with.

Being placed inside IR35 can cost contractors up to 30% more than it would when working outside of the rules. In short, they are deemed ‘employed for tax purposes’, meaning they pay similar taxes to employees. A huge sticking point, however, is that they do not receive any permanent employment benefits - yet must pay significantly more in tax.

We recently launched Caspian Partnered Capabilities. Designed to empower businesses and freelancers alike, this working model enables us to provide contractors with an answer to the implications of IR35 - along with access to unique and commercially attractive projects. | | call +44 (0) 203 691 9168
For more information.

While contractors won’t be liable for any missing tax (this is expected to rest with the end-client and when involved as the fee payer, the agency) - independent workers are worried that they will be unfairly placed inside IR35.

Unfortunately there are presidents for this in the public sector, with many businesses having automatically placed contractors inside IR35 in order to protect their liability.

To combat this, IR35 consultancies such as Qdos for example, are working hard to ensure the medium and large companies that will soon be in charge of IR35 status decisions, make well-informed determinations.  

Ultimately, IR35 reform is manageable, and contractors will be able to continue to operate outside the rules going forward. The onus, however, is now on private sector businesses to prepare well in-advance.

If your unsure of your status, it’s well worth having your contract reviewed by an independent expert. This can be used to set status initially and, when further changes are enforced, challenge an incorrect decision made by a client.

Next in this IR35 series, we will be helping you determine how IR35 might impact you - and how to prepare in advance. Don’t miss out!

- subscribe to our community at the top, or simply click to follow us on LinkedIn.

Still unsure on IR35?...
Take 60 seconds to watch this video from Qdos Contractor.

Posted by: Caspian One 0 comment(s)

Add your comment.

Knowledge | Resources | Behind the Scenes

Managing your career in the face of uncertainty
2020 has been a year of crisis and disruption. Millions of people have been furloughed, saw their incomes significantly reduced – or are adapting to entirely new and strange working arrangements; remote or socially distanced....
Interview Checklist: For Remote Recruitment
The following information aims to highlight what candidates can expect when being recruited from home - while providing advice and an interview checklist to follow.
IR35 postponed to 2021 - an update from Caspian One
"While the Government's postponement of the IR35 legislation was seen as a welcome announcement by the industry, the added pressure of the COVID-19 outbreak is eating into the time available to better prepare and react, and as a result, the revised implementation date will appear much sooner than ex...
Remote work in exceptional circumstances
On Monday this week, following guidance set-out by the UK Government we decided to activate our business continuity plans and facilitate home working; across the entire business....
Welcoming new additions
This March Caspian One welcomes two new consultants - Joseph Poynter and Will Brown. Joining our successful North American division, these new starters will be supporting the growing demands of our clients in Toronto; focusing on UI and Java capabilities.
IR35 Review 2020 - A Government keeping their election promise
A Government keeping their election promise. During a radio interview in December 2019 Sajid Javid, Chancellor of the Exchequer promised a review of how the Government can further help the self-employed. What happened next? - Continue reading