I have come to rely on AAB to guide me with the production of the annual accounts and with the application of our accounting policies. It is comforting to have AAB's help and guidance.
Bob Hutcheson, UCAN
IR35 – Off Payroll Working
The IR35 changes were finally rolled out in the private sector in April 2021 after being around in the public sector since 2017, and has profound changes for some employers and contractors. As IR35 specialists, we can explain this ‘off payroll working tax’ and how it might affect you and your business.
Brian Robb
Payroll & Employment Taxes Senior Manager
Who we can help
- UK ENTITIES
- SMES
- PRIVATELY OWNED & LISTED BUSINESSES
- OVERSEAS ENTITIES
- PUBLIC & SOCIAL SECTOR ORGANISATIONS
How we can help
- PAYROLL
- GLOBAL MOBILITY
- UK EMPLOYMENT TAXES
- OVERSEAS EMPLOYMENT TAXES
- EXPATRIATE TAXES
- EMPLOYEE BENEFITS
- SYSTEMS & SOFTWARE
BRINGING CLARITY TO OFF PAYROLL WORKING
Get advice on IR35IR35 is tax legislation that applies to off payroll working. It’s intended to close a loophole where contractors effectively work as employees, but avoid paying the appropriate tax by working through a limited company.
IR35 was introduced to the public sector in 2017 and has attracted criticism for its complexity. The latest rules to come into effect have not made it any simpler. Nevertheless, there are penalties and sanctions if an HMRC enquiry decides IR35 applies but has not been complied with. Our tax experts can explain the IR35 off payroll working rules and talk you through the necessary actions, whether you are the end-client or a contractor.
WHAT DO THE LATEST IR35 RULES MEAN?
The IR35 ‘off payroll’ public sector reforms were extended to the private sector from April 2021 onwards, following a delay due to COVID-19. These changes have seen the responsibility for determining whether an engagement falls within the IR35 rules move from the worker’s Personal Service Company (PSC) to the end user (including where PSCs are engaged via an agency).
If the engaging organisation deems that IR35 applies, the end user must apply PAYE/NIC on payments made to those PSCs if it pays them directly. Otherwise, the agency would be responsible for applying PAYE/NIC to those payments, based on the end user’s IR35 assessment.
While IR35 rules currently only apply to large and medium sized enterprises that engage contractors through PSCs, we expect to see them being phased in for small enterprises in future years.
I contemplated transferring my business to a limited company and I knew I could rely on AAB to make the process as straightforward as possible whilst providing the accounts and tax advice to enable me to make the right decision.
Colin Brown
AAB helped to build the Workflow Max application around our business needs ensuring that it met the very specific project requirements. From implementation to the present day, AAB have provided all the support and training we need.
Mark Burntonwood, Director
CONTRACTORS
Our extensive IR35 knowledge means we’re also well placed to support contractors with these off payroll working services:
- HMRC enquiries into your IR35 status for any years prior to 6th April 2021 when it was the PSC’s responsibility to report correctly.
- Independent IR35 determination reviews to help support your position or any challenge against a status determination you have been issued.
- Providing contractor or PAYE net pay comparison calculations to help you assess your position and provide the best route for you and your company.
- Advice on the future position of individual PSCs and assistance with voluntary liquidation where appropriate.
Where the latest IR35 rules mean you move from a contractor relationship to an employee relationship, that leaves your PSC as a potentially unnecessary entity that needs to have its affairs wound up.
This deserves careful consideration, as how the PSC is closed can have significant tax implications for its shareholders. Our experience in dealing with these circumstances means we can ensure the whole closedown is carefully controlled from start to finish, using the most cost-efficient and tax-efficient processes.
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