IR35 Protection Services
IR35 rules about tax for contractors are being rolled out in April 2020 to the private sector. Are your subcontractors affected?
In its response to the House of Lords Report, HMRC announced that the cost of removing IR35 would be £550million in lost taxes to the Exchequer. As HMRC has created four specialist offices to deal with IR35 investigations, one would imagine that the intention is to police IR35 better in order to increase tax revenues.
However, it is not just enquiry activity that is of concern; the tens of thousands of freelancers in the public sector have to provide an independent assessment of their IR35 status. Moreover, any contractors caught by IR35 will no longer be able to claim Travel & Subsistence Relief on their home to client site travel, which will add a further tax burden.
It is therefore essential to understand your IR35 status; and there is no better starting point than a comprehensive and independent contract review. We provide a review service to examine your contracts, along with your working practices, to determine whether or not you are operating outside of IR35.
You will receive a written report with suggested contract amendments where appropriate, together with an opinion on your status. Whilst HMRC are still at liberty to challenge the opinion, it does demonstrate that you have undertaken the appropriate level of due diligence. This means that in the event of HMRC being successful in arguing that IR35 applies, they should not be able to levy a penalty, which would save you a further 15% to 30% on any tax bill.
