Clare Lacey, our Business Unit Director discusses the upcoming change in tax legislation in the United Kingdom for contractors and what we at Ntegra are doing to educate and help those involved with the challenge ahead.

Are you ready for IR35?

If you are currently engaging contractors to deliver your projects, then IR35 will impact you.

IR35 is the tax legislation that is about to be put in place by HMRC that aims to identify whether a contractor working on an assignment for a company is truly a contractor or if they are an employee in all but name. If the contractor is found to fall inside IR35, then they are deemed to be a “disguised employee” and their income will be subject to PAYE tax and National Insurance.

What are the main determining factors? 

If they fall outside IR35, they are deemed to be a business in their own right supplying services and can continue to operate via their Personal Service Company (PSC).

The changes in legislation (April 2020) will mean that the end client will be:

Many private sector companies are taking the very conservative approach and making blanket assessments declaring all contractors inside IR35 or banning the use of limited company (PSC) contractors altogether. This is having a huge impact, sometimes resulting in a mass cutting of contractors, which consequently has a huge loss of talent for these companies and a big knock-on effect in their ability to deliver projects.

How can Ntegra help? 

As an independent consultancy, we can handle the complexity that IR35 presents to manage our dynamic workforce of both permanent staff and contractors. Whether contract roles are inside or outside of IR35, we can maintain the contractual and working conditions needed to access the most extensive pool of talented professionals. We back up these practices with robust and fair IR35 assessments and project management discipline. 

The ability to operate inside and outside IR35 roles gives us the most comprehensive choice when resourcing our projects.  As a side-effect, it also provides our clients with an attractive alternative to engaging contingent workers through recruitment agencies. Rather than hiring against a role, our clients engage us for a solution, and we manage the complexity and resourcing accordingly. Some of these requirements can then be resourced with contractors operating outside of IR35.  Our clients acquire the expertise and capacity needed, mitigate interruption of their projects, and also offload some commercial risk.

 

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