The implementation of IR35 into the private sector has been set for April 2020. The only businesses that are not effected are those who don’t have a turnover of less than £6.5m, a balance sheet totalling more than £3.26m, and those who have no more than 50 employees.
This means finding a compliant solution before this date is essential as leaving it to the last minute is not an option. HMRC have not yet announced the fines or fee’s that it will put in place for those that do not comply so being prepared is essential.
We all knew it was coming and we all know the effect it has had in the public sector, most noticeably within the NHS. People are adjusting. While not necessarily accepted, most understand that there not many other options that they can turn to. When it was implemented in the NHS, there were those that moved over to the private sector. Like the story of the Hare and the Tortoise, believing that you are ahead of the game is not always the case.
Complaining has had no effect
I have read much about the shortcomings of the implementation or IR35 in the private sector. The cases raised, the cases won and the cases lost but the loudest of all, the outcry from many. The bottom line is that based on the reclaimed tax combined with the recent budget, it is coming. The fact that they have not decided to implement it next year shows that they understand that people need more time. It also shows that they will not back down.
Change is inevitable. Life is full of change. To quote a sample on an old record I have ‘can’t beat the system, just go with the flow’. We face a period of adjustment: we will shout, we will moan but we will have to move past it. At the moment the benefits are absent for most who are affected by it but who knows what the future will show. I would be shortsighted to lay claim to any predictions so will leave it to time and facts.
Despite the shortcomings and issues with the CEST (Check Employment Status for Tax) tool and the interpretation of Mutuality Of Obligation (MOO), HMRC are determined to move forward with IR35 in the private sector. Forums have been held, opinions have been voiced and oppositions have been raised. Yet like the coming of winter it will come and we have been told.
Are you ready?
Let’s be prepared. As a compliant umbrella solution we were built from the ground up ready for these changes. We ensure the correct contributions are paid (compliantly). We take the stress out of managing your accounts, having to file a year-end report and worrying if HMRC will come a knocking. 2020 is not that far away and being ahead of the game is better than being sent off because you ignored the rules.
If you are unsure if you are affected or if your agency has told you you need to move over to PAYE via Umbrella Payroll then give us a call and let us help you. Even though you may not have to make that change now we can help give you an idea of what to expect.