Insight

IR35 Insights for contractors

By Claire Sharp |

The extension of IR35 legislation from 6th April 2020 will move the responsibility for IR35 status determination from the contractor providing the services to the end customer. This change will only affect medium and large private sector end-customers as small companies are set to be exempt and the old rules will apply.

Our commitment is to guide and facilitate compliant solutions to both our customers and to the contractors we work with to ensure that all parties remain wholly compliant and abide by the ramifications of those changes and to ensure that we can help with your next project move.

Understanding the changes to the legislation must be a priority to ease concerns which have arisen as a result of misconceptions and inaccurate rumours. We at Vine Resources are committed to providing that support. As a result, we have set up an IR35 helpdesk, headed by Claire Sharp, to provide guidance and clarity to assist in the transition period and beyond.

Definitions:

End customer – The end customer is where the contractor is placed and performs the work.

Fee payer - The fee payer is the agency that arranges the fee payment to the contractors.

Determination - The process of assessing a contractor’s employment status by careful consideration of all the facts by the end customer.

PSL Umbrella Company – An umbrella company from within our PSL of trusted umbrella companies instructed by us to deduct statutory taxes and National Insurance before payment is made to the contractor.

Personal Service Company - A personal service company is a limited company.

A determination decision undertaken by the customer must consider the working relationship between the customer and the contractor and whether an “employee/employer” relationship has been created and the customer must demonstrate that reasonable care has been given to that determination.

There are key questions that will need to be considered by the customer and a checklist of those considerations can be accessed here.

An inside IR35 determination will require us as the fee payer to ensure that full statutory deductions are made from gross fee payments by one of our trusted umbrella companies to comply with that determination and nett fee payments will be made to the contractor directly on a monthly basis. We cannot unfortunately use the services of an umbrella company who is not on our PSL.

An outside IR35 determination will confirm that there is no employer/employee relationship and the contractor may continue to assess his/her own status and supply their services through their PSC if they so choose. To safeguard all parties, specific insurance against an investigation by HMRC for the assignment will be required to mitigate the risk of an investigation in addition to Professional Indemnity insurance.

We appreciate that a status determination can be a contributing factor to contractors looking for a new assignment and we are supporting our customers to provide support and guidance to make sure that an accurate determination is made but it is important to stress that we cannot influence their decision.

We would be happy to discuss further any queries you may have.

Contact:

IR35 Helpdesk: info@vineresources.com

IR35 Compliance Director Claire Sharp


Claire Sharp

Written by Claire Sharp

I'm the Operations Director at Vine Resources managing all operations and compliance in the company

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