Terry Porter, Director of Engineering Division, Rubicon Recruitment Group, answers your questions.

What is IR35?

It is a piece of legislation designed to tackle tax avoidance from ‘disguised employment’ in situations where an individual contractor is providing their personal services (i.e. labour). Under current IR35 rules, the contractor is responsible for assessing whether IR35 applies and, if so, operating PAYE and NICs.

How is IR35 changing?

The plans for changing IR35 rules in the private sector arise from concerns HMRC had regarding non-compliance whilst responsibility lies with the contractor to determine their own status. When the rules change at the beginning of April, responsibility for assessing whether IR35 applies to any particular engagement will move from the contractor to the ‘fee-payer’.  If the fee-payer determines that the engagement is one of employment they have a responsibility to inform any interim business (such as a Recruitment Agency) that PAYE and NICs apply. If they fail to do so when appropriate, they become liable for any unpaid taxes due.

How can hiring managers prepare?

With only weeks to go before IR35 takes effect, applying a genuine understanding of the intermediary’s legislation and off-payroll working rules is key. You need to assess whether contractors meet the criteria to be genuinely self-employed and the potential impact of continuing to use contractors within your business.  If you need any advice or clarification on the changes to IR35, please give me, Terry, a call.

• Rubicon continue to support a wide range of businesses with their immediate recruitment needs as well as providing permanent staff, contractors and temps to a wide range of business in and around Dorset and Hampshire. If you need help, as an employer, a temp worker, a contractor and/or as a potential applicant for a permanent job, then please get in touch by calling 01202 680311 or emailing [email protected]
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