The incoming IR35 regulations were due to come into place in April 2020, but due to coronavirus the IR35 has been delayed. The new date for IR35 regulations to come into effect is 6th April 2021. While this is just over 6 months away, it’s something to think about now. Some huge changes could take place for a lot of contractors and businesses.
IR35 is taken extremely seriously in the recruitment world. It is a tax legislation that can affect both our clients and our candidates.
What Is IR35?
While IR35 has been delayed, it was bought in by HMRC. HMRC are keen to tighten their grip on contractors that they feel are ‘pretending’ not to be employees. In layman’s terms, the IR35 has been designed to stop fraud. Many workers claim to be contractors for tax purposes and benefits. This new legislation aims to stop this. The legislation aims to stop those who act like and are treated like employees, pretending that they aren’t.
Who Does IR35 Effect?
The IR35 legislation challenged those that supply their services to clients via their company. If you are a contractor, it is essential that you are fully IR35 compliant or you could be caught out by HMRC and their newest legislation.
How Can I Find Out If I Am IR35 Compliant?
While HMRC don’t clearly show the divide between employees and contractors, they do help in another way. Check out the HMRC website. On there you will see a variety of questions that will help you distinguish if you are an employee or a contractor. For example, if you are a contractor and receive bonuses or benefits from the business, then you would be classed as an employee. This is due to the fact that the employment by the company is seen as an external contract.
What If I’m Not IR35 Compliant
If HMRC find that you are not fully IR35 compliant then there are some significant financial penalties.
More IR35 Information
For more information visit the HMRC website – https://www.gov.uk/government/organisations/hm-revenue-customs
The legislations of IR35 has been delayed and put back a whole year. However, this is already just 6 months away. If you are concerned about your workers that may not be IR35 compliant call our team and we can help with your recruitment Cambridgeshire. If you are a contractor and want to become an employee, we can help you with that too.