If you are wondering what end clients and recruitment agencies are doing with respect to IR35 please visit http://www.offpayroll.org.uk or click here.
I have had a look at the various lists and from what I can tell it appears to be accurate and it appears to reflect user-generated opinions. From what I can tell, it appears that around 66% of end clients are essentially banning limited company contractors (which is more than double HMRC’s estimate of 30% of contracts being inside IR35).
I guess this knee jerk reaction to the ‘hassle-free’ PAYE option was always going to be on the cards. Especially when you think about how difficult it will be for end clients to assess 1,000’s of contracts every 6 months, produce 1,000’s of status determination statements every 6 months, dealing with 1,000’s of appeals every 6 months, dealing with HMRC investigations/tribunal cases, the risk regarding potential unpaid tax liabilities (NHS Digital recently owed £4.3 million just for around 100 contractors working for only 18 months).
More importantly, the website also provides a list of outside IR35 contracts that you can apply for and is updated daily and therefore is worth visiting every day for the latest information.
IR35 Client and recruiter off-payroll changes
HMRC have issued a contractor factsheet which you can find here. As you can probably guess, the review that Sajid Javid announced during the election campaign trail has turned out to be a bit of a hoax.
Javid, while canvassing for votes, did initially plan to see if it was right to take the proposed changes to IR35 forward. However, now that he is safely back in number 11 the review has morphed into looking into how the off-payroll changes can be best implemented and how to ensure contractors are fairly assessed.
The issue here is that many organizations do not want to assess 1000’s of contractors every 6 months, produce 1000’s of status determination statements every 6 months, deal with 1000’s of appeals every 6 months, deal with HMRC investigations and potential tax bills in the £100’s of millions, they just want to simply ban limited company contractors instead.
Maybe as a way to stop their permanent workforce leaving and starting up as limited company contractors! As the Government has no plans to delay or cancel the off-payroll changes (which have already been in the public sector for around 3 years) it is time to start preparing (even though the HMRC factsheet says the contractors need not do anything) and start thinking about what you will do in a worse case scenario.
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AR Tax Accountants
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The above information is just for guidance purposes only and is not a substitute for professional advice and consulting the legislation.
