Following the budget announcement, I think I speak on behalf of the entire population; it is a lot to digest and understand. With that said, the Government have predicted that the United Kingdom will return to pre-covid levels by the middle of 2022.
As we are all aware, the IR35 reform will be going ahead and those contractors operating through a limited company, deemed to fall inside of IR35, will no longer be able to do so come April 2021. We have already seen some enquiries come through for those who fall outside of the legislation, following the announcement that corporation tax will be increasing by 6% in 2023 (if not sooner)!
Many of the “big players”, such as Metro Bank, Serco, Deloitte and Three UK have banned contractors operating through a PSC moving forward. We believe they have taken this stance to eliminate the concerning risks surrounding the IR35 legislation and all it entails.
We have heard of payroll providers and some agencies having the opinion of the timing not being quite right or wanting to put off the reform. There has been rumours that not delaying the reform will “damage” the flexible working. ePayMe think quite the opposite. Unfortunately, there are some companies and contractors not operating compliantly and simply setting up a limited company, thinking they can skirt around not paying employers National Insurance and any other statutory deductions.
We know the Government are eager to make headway with the changes to the off-payroll working rules, to evade any further debate. HMRC declined to provide a broadcast on how the rules may change later on down the line. There will be some contractors left feeling disgruntled, that still believe these changes will not be going ahead.
We have put together some Myths & Facts that may help you and your workforce understand the difference:
Myth 1) If you are deemed to fall outside of IR35, but work with just one end client, you are still “deemed” to fall outside of IR35.
Fact 1) If you are deemed to fall outside or IR35 within the role, but working with one end client, you may still fall inside of IR35.
Myth 2) I am working through an agency who is exempt from the IR35 changes, therefore I can continue working through my limited company.
Fact 2) There is no exemption. Determination still needs to take place, via HMRC’S CEST tool.
Myth 3) Short-term assignments are never going to be inside of IR35.
Fact 3) IR35 assessments must still take place, regardless of the length of the assignment. HMRC still inspect particular tax years.
Myth 4) My place of work is overseas, therefore IR35 will not apply.
Fact 4) Even if the client and or workplace is based overseas, providing your limited company is a UK based company, you and your company are subject to UK law and the UK taxation.
Myth 5) Limited Company workers are worse off under PAYE.
Fact 5) With accountancy costs and setting aside tax, this should not be the case. ePayMe can provide estimated calculations to give an estimated net take home pay.
Should you wish to discuss your options please contact us on 01252 863 700 or email sales@epayme.co.uk