IR35 and Day Rate Contractors
Much is changing in the world of day rate contractors
Two years ago the law was changed as to who HMRC hold responsible for incorrectly your employment status. In the public sector, they started holding the clients accountable. The result was mixed. Numerous contractors left the public sector but many took an income cut and went onto the payroll. We also say public sector bodies going out to get
Moving to large firms the private sector from April 2020
From April 2020, the changes implemented in the public sector are being moved to large companies in the private sector. Day rate contractors working for banks, insurance, technology sectors could be heavily affected. We are aware that some banks are already off-shoring work previously done by contractors and only selectively hiring some of their contractors.
What you need to know
- There are 3 defences to a challenge over your employment status. We will happily explain them to you.
- Your contract needs to document your status to minimise its chance of being classified as being caught by IR35
- You need to behave like an independent contractor and not an employee. We’ll tell you how.
- We can review initial contracts and extensions to see if they are at risk of being caught by IR35
Limited company set-up and compliance
- You probably need to act through a limited company to be a day rate contractor
- It takes a day to register a limited company. We can do that for you.
- You will need to open a company bank account which may take a few weeks.
- You will need to register for VAT and comply with Making Tax Digital. We can do that for you
- You will need to file annual corporation tax returns
- We can set that up and take care of most of the compliance requirements around that for you for a fixed monthly fee (starting at £149 pcm plus vat) and give you unlimited general email/phone support.
Require more information?
If you would like more information or would like to speak to us direct then call us on 020 7205 4700. Or if you would prefer, ask us a question online.