IR35 for Contractors

The extension to the off-payroll rules (“IR35”) is causing confusion and additional risk to your feepayers and as a result they are making short term decisions on their future use of contractors based on uncertainty and fear.

The extension to the off-payroll rules (“IR35”) is causing confusion and additional risk to your feepayers and as a result they are making short term decisions on their future use of contractors based on uncertainty and fear.

It is unlikely that the engagers will increase their rates to compensate for the additional levies that an inside IR35 decision imposes on the contractor, and therefore you may see your take home income reduce by 20-25%.

This will have long term consequences for any anyone who continues to contract post 6 April 2020 even when they way they operate clearly puts them outside IR35.

What can be done?

In our vast experience in dealing with engagers, it is not that they do not appreciate and value the skills that contractors bring to their organisation, but rather are fearful of the risk of potentially large tax liabilities being placed on them for getting a process they do not fully understand wrong. 

Internally they are simply unsure of the tests they need to conduct or the way they need to operate for the engagement to be outside IR35 and have therefore taken the nuclear option.  Tax departments have looked to HR departments, and vice versa, with neither willing to take the lead in finding a way to keep some of the best talent they have. d

IR35 assessment tools exist, including HMRC’s own CEST tool, however many are flawed or indeed can be ‘gamed’ with the responses given not reflective of reality simply to produce an outside IR35 result.  Indeed, the official CEST tool has been said in open court to have no weight in evidence of somebody’s status so it is hard to see how any other AI driven solution could be relied on. HMRC are likely to be sceptical of anyone being assessed as inside IR35 simply on the basis of a questionnaire, electronic or otherwise.

What this situation calls for is for the experts to take control, review the contracts in place together with the day to day working practices of both the engager and contractor, and give an honest appraisal of the IR35 position and the risk to each party in the chain. Only then can the engager have confidence in the right assessment being made and be open to a dialogue that assures them that their risk has been minimised allowing them to retain the best talent.

How can WTT help you achieve this?

Our Legal team is led by Carla Roberts who has more than 20 years experience in this field and was previously Senior Legal Counsel for a major UK agency.

It is this experience that is brought to bear when comprehensively reviewing your next contract for IR35 status.  Through this review and discussions with yourself, we can give you an opinion on whether we believe your engagement to be inside or outside IR35, together with a report on the contract clauses that expose you to risk.

Where our opinion is contrary to that of the engager, we can open discussions with them to understand their concerns and either give the reassurance through our vast experience or discuss changes to the contract that are agreeable to both parties which would remove the risk.

That contract would then be monitored on an ongoing basis for full compliance ensuring all parties do not unnecessarily expose themselves to unwanted tax liabilities.

What services do we offer?

We offer a range of services that can be tailored to your needs, not just in regards to IR35 but also additional taxation and legal services. These include;

  • IR35 Contract Reviews and Status Determination
  • In contract adherence checks
  • Discussions and negotiations with end-client and agency
  • Newsletters and Updates
  • Access to job board
  • Access to The Contractor Co-op when inside IR35
  • Tax compliance, self-assessments and filings
  • Company Bookkeeping
  • HR and Employment Law Helpdesk
  • Personal Tax Planning review
  • Will drafting
  • Tax Investigations and PI Insurance Review
  • IR35 Investigations Cover

Speak to the team today to discuss how we can prepare you for the future and preserve your wealth.

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WTT really is a life line in what can only be described as a nightmare situation. I know there will be more brown envelopes dropping through the door, but I have faith that WTT will come through with the settlement.