Top tips for IR35

Advisory, Employment Tax

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IR35 deadline and what business need to check 

The changes to IR35 are due to come into force on 6 April 2021 and even with the ongoing pandemic the hopes of a further postponed by the government have not materialised as the Chancellor see this as a key strategy to raise an extra £1 billion in tax to cover the costs from COVID-19.

So, with only a few months to go, we have put together below the top tip’s businesses in the private sector should follow to make sure that they are complying with the changes.

1) Check if you are caught

IR35 will not apply to small businesses

2) Find out who works for you off-payroll

Is it personal or composite services supplied?

3) Ask the questions

Undertake an employed v self-employed assessment of each personal services arrangement, using established case law

4) Know the right responsesTop tips for IR35

Having evaluated using case law run the answers through the HMRC Check Employment Status Tool (CEST)

5) Review the results

Who does CEST say are employed (within IR35), self-employed or undetermined?

6) Get in to the detail

Look at those that are within IR35 or undetermined to see if there is anything that needs clarifying or changing

7) Do the maths

Calculate the potential impact of moving those within IR35 on to the ‘payroll’ for tax/NIC and apprenticeship levy

8) Move in the right direction

For those that will be within IR35 start moving contracts and payment dates to some ‘standard’ dates and arrangements to make the admin easier

9) Get set up

Establish how you will run the ‘payroll’ for those within IR35 so you are ready to fulfil your new compliance responsibilities

10) It’s good to talk

Don’t leave it until later, ensure you clearly and regularly communicate throughout the ‘process’ with all internal and external stakeholders to ensure you minimise ‘nasty surprises’.

Download a copy of this key tips sheet below or get in contact with a a member of our IR35 team:

Richard Maitland
Partner

T: 07711 373 584
richard.maitland@mhllp.co.uk
Nigel Morris
Tax Director

T: 07718 340 634
nigel.morris@mhllp.co.uk
Gordon Thrower
Senior Tax Manager

T: 02074 294 137
gordon.thrower@mhllp.co.uk

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Top tips for IR35



Advisory, Employment Tax

Get in touch with our expertsEnquire now