I’ve been doing some contracting work myself whilst working for Compelling Media and Telford and Wrekin Council, I’ve been reading about IR35 but and preparing for the changes that will bring, but I don’t think contractors in general are properly aware of what it means and the impact it will have on them.
IR35 has been around for some time and applies to Officer roles and the public sector, from April 2020 onwards it is being rolled out to the private sector for Medium and Large companies based on the Companies Act definitions of 50 employees and £5m turnover.
What it means is that if a contractor is under the control of the company then they should be deducting PAYE and NIC from any payments made and treating the contractor as an employee but without holiday pay and other benefits, if the contractor works via an agency then the payments they make need to go through an umbrella organisation which then deducts PAYE and NIC instead. So if a series of test on control are met, then that person has to have PAYE and NIC deducted somewhere or by someone.
Talking with agencies they are not clearly saying that to prospective contractors and are very vague in how potential contracts are presented.
This will hit hard if the Government are tough with the enforcement of the change, to what extent this is going to be tough is hard to say, all will soon be revealed however!
A great forum I have come across on contracting and my profile can be found at contractinguk it is a bit lefty and full of pushing arrogant liberal types but at the same time full of very knowledgeable people.
