Preparing for Change

End-Client & Fee Payers

As an end user or agency that engages with PSCs, there are a number of steps that you need to take to help you ensure compliance with the changes:

  • Identify potentially impacted workers
  • Assess those contractors to determine which would be deemed to be employees under the status tests
  • Engage with key stakeholders, including legal, tax, finance, operations and HR and agree responsibilities and ownership areas
  • Estimate any likely cost increases due to Employers’ NIC and Apprenticeship Levy charges rising under ‘IR35’, and potential changes in contractors’ rates
  • Consider whether tax fee protection insurance should be purchased to protect in the event of HMRC Enquiry
  • Design and implement new systems and processes for dealing with those contractors impacted by the changes
  • Train relevant internal teams on the changes in systems and processes and ensure they are able to effectively determine the IR35 status of engagements
  • Communicate with contractors to ensure they are aware of the changes and fully aware of the decisions that are being made
  • Critical assessment and ongoing review of your systems and processes to ensure continued compliance with the legislation

Contractors

Our vast IR35 knowledge means we are also well placed to assist contractors with the following off-payroll working specific services:

  • HMRC enquiries into your IR35 status for any years prior to 6th April 2020 when the obligation to report correctly remained that of the PSC
  • Independent IR35 determination reviews to help support your position or any challenge against a Status Determination you have been issued
  • Contractor or PAYE net pay comparison calculations to help you assess your position and the best route for you and your company

Where the implementation of the reformed IR35 rules result in a move from a contractor relationship to an employee relationship, that leaves the contractor’s PSC as a potentially unnecessary entity that requires to have its affairs wound up. This issue deserves specific consideration, as the manner in which the PSC is closed can have significant tax implications for its shareholders. Our extensive experience in dealing with these circumstances means that we can ensure that the whole closedown is controlled from start to finish, and the most cost-efficient and tax-efficient process undertaken.

How AAB Can Help

Our experience and expertise will help ensure businesses are fully prepared for the reforms to the IR35 rules.

IR35 Project Management diagram

“Many thanks for the meeting today to discuss the status opinion you prepared for me. I found it extremely useful in planning for the future changes around IR35 & off-payroll working. Your advice and observations were very clear and detailed and I have found the whole process professional and well structured.” Independent Contractor (Name & Company withheld)

For more information and a no obligation discussion please contact our expert IR35 Team on email: IR35@aab.uk or by calling +44(0)3332 419887