IR35. The government’s way (in our humble opinion) of trying to stop contractors earning as much money as they should. Contracting can pay well but this reflects the risk, lack of holiday pay, low job security, lack of employment rights and everything else that you take on the chin.
It would be great if this blog was all about how IR35 has been stripped of much of its power and that you don’t need to worry about it anymore. Unfortunately it’s not. Just the opposite, in fact.
From April 2017 (just six months away), the government is almost certainly unleashing new legislation which means that if you’re a contractor in the public sector, it’s no longer just your responsibility to declare your IR35 status – it’s the recruitment agency or other third party nearest to your limited company in the food chain.
The end-clients you work with are likely to be more nervous about being caught by HMRC than your take-home pay, which ultimately means more people are likely to be declared as being “inside IR35” (caught by the new legislation) than before.
Clearly, being inside IR35 means a lower income than outside, but before you make the decision to declare yourself outside, don’t forget that if you are investigated by HMRC, the penalties, PAYE and NI bills can mount up quite quickly.
As ever, the advice is the same: if you are a CEJ client, you’re in the hands of experts. If you feel you might be affected by the new legislation we are here to help. Email Jo (firstname.lastname@example.org) or Peter (email@example.com) and we’ll take it from there.