In a compassionate move by HMRC, the implementation of IR35 into the private sector has been postponed until April 2021. This is due to the impact Covid 19 has had on the everyday and working life of many.
As much as it has given affected contractors a reprieve, this still means finding a compliant solution before the implementation 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.
It was planned to be here by now but due to the situation created by the Covid 19, the date was pushed back. Some companies had already adopted a stance with all new contracts ensuring that payments would be processed through an IR35 compliant solution. While not necessarily welcomed, most contractors understand that this is the only option beyond gaining full-time employment. Contracting as we have known it has come to an end. Or so we thought.
The effects of Covid 19 have been felt far and wide especially within the recruitment sector. Uncertainty on furlough rights, contracts not being renewed and lack of new contracts have all played a part on pushing the IR35 change date back to 2021.
No change except for the date
The shortcomings in the implementation or IR35 in the private sector has been scrutinised and complained upon by many. The bottom line is that based on the predicted reclaimed tax combined with the potential financial status of the UK post-Covid mean that it is definitely coming.
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. Despite these concerns HMRC believe it is in the best interests of the economy to more forward with IR35.
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 still being paid through your Limited Company we can still help you by processing your payments as normal. If or when you need to switch to umbrella next April we can ensure that the process is as smooth and seamless as possible.
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.