New off payroll working rules are due to come in for all contractor payments received after 5^th April 2020. They are up for review and we may not know when or if they are coming in until after the budget – scheduled for 11^th March.

Off-payroll working moved the obligations for reviewing IR35 status, for work done as a subcontractor, from a personal service company to the end user.

You need to be prepared – ask for your status determination statement now so you can take action. After 5^th April 2020, under the new rules, every contract for services, where the end user is a large or medium sized organisation, should have a status determination statement issued by the end user, determining the application of taxes on payments made after that date.

If the determination is “not caught by IR35” then you can carry on as usual.

However, if your statement determines you are “caught by IR35” then you must decide on your course of action. Here are some options:-

1. Appeal for a new determination – do provide evidence as you should be able to teach these novices
2. Switch to using an umbrella company to receive your monies – as the easiest option for all and you retain some rights to benefits and employment rights
3. Move over to client payroll – to get your full employment rights but beware HMRC trying to imply you have always been caught i.e. been an employee
4. Terminate this contract ASAP to get a more tax friendly one, or one with a small end user.
5. Suffer the PAYE taxes on these payments, maybe as not a significant part of your annual income

If you would like more details on this subject then do ask for our advice sheet

Firestone Accountants  – Southampton Accountants