IR35 Compliance Services
What is IR35?
IR35, refers to the Intermediaries Legislation, set out in Chapter 8 Part 2 Income Tax (Earnings and Pensions) Act 2003 (‘ITEPA ‘).
In simple terms, IR35 is the tax legislation introduced in April 2000 to stop tax avoidance by contractors that are engaged and paid through an ‘intermediary’ (typically a UK limited company) but would be considered an employee if an intermediary was not involved.
This means that anyone being engaged and paid via their own Personal Service Company (‘PSC’) that has the characteristics of someone with the employee status, could be in the scope of IR35. If IR35 applies, the PSC may be paid gross, however the PSC must operate PAYE on payments made to the worker. Under Chapter 8 ITEPA, the PSC entity has responsibility for adhering to IR35 and any liabilities for incorrectly applying the legislation.
Off-payroll rules in the public sector
As of 6 April 2017, any arrangement in place where a public-sector authority is the recipient of the labour, the public-sector body is liable to make a determination as to whether the PSC worker would look like an employee without their intermediary. This is governed by Chapter 10 ITEPA.
It is usually the responsibility of the “fee payer” i.e. the entity who engages the PSC, to correctly apply PAYE, based on the public authority’s determination. However, there are occasions whereby the “fee payer” liabilities can be transferred to another entity.
Off-payroll rules in the private sector
The same rules were also extended into the private sector with effect from 6 April 2021, following the publication of a consultation in March 2019. Aspire are able to offer IR35 training to you and your staff, as well as implementing processes and procedures and updating contractual documentation.
How can Aspire help with your IR35 compliance?
- Chapter 8 ITEPA advice
- Chapter 10 ITEPA advice
- Review your engagements with limited companies and/or PSCs
- Working practices
- Contractual documentation
- Conduct employment status checks
- Preparing IR35 policies
- Assisting with Status Determination Statements
In event that your company is subject to a HMRC enquiry with regard to employment status, we can advise on, and assist in, communicating with HMRC and remove the stress of handling the investigation.
Contact Aspire
If you need any advice or assistance with your IR35 compliance, call us on 0121 445 6178 for a no-obligation discussion.
