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IR35 is finally here – How an umbrella can help you out

After years of debate and delay, IR35 reform for the private sector has finally arrived.

The legislation finally became active on 6 April 2021, bringing private sector contractors in line with the public sector, and changing the way contracting is done in the UK.

First announced in 2018, they were supposed to be implemented in April 2020, but were delayed until this year because of the Coronavirus pandemic, giving contractors and their clients extra time to prepare and implement changes.

Now IR35 is finally here, though, what are the changes that contractors need to be aware of?

Well, it all depends. If you’re a contractor, are you supplying work to a medium- or large-sized private sector client?

Are you providing your services through a Personal Service Company (PSC)? Have you had an assessment from your client and received the correct documentation?

IR35 can be quite confusing. In short, the government has introduced IR35 reform to the private sector to make sure that contractors are paying the right level of National Insurance Contributions (NICs) and Income Tax.

Otherwise known as off-payroll working rules, IR35 is mostly aimed at contractors who are providing their services to one client, which would essentially class them as an employee.

And it’s the end client who, now, has to make a determination whether a contractor falls within or outside IR35. That responsibility used to lie with the contractor.

For contractors, it’s a seismic change to the way they work and throws up a lot of questions about their future.

How an umbrella company can help you understand IR35

Partnering with the right umbrella company, though, can help you navigate the complexities of IR35 and help you ensure compliance at all times.

If you are a contractor and are supplying your professional services to a medium- or large-sized company, you should:

·         Get an employment determination status from your client,

·         Get in writing the reasons behind that determination,

·         Have access to a dispute mechanism if you disagree with your determination.

IR35 has been so controversial over the last few years because many contractors and clients argue that it’s just a lot of ‘unnecessary’ paperwork to their already heavy load.

At Greatpay, we believe that contractors do their best work when they’re unburdened by the paperwork and administrative tasks that come naturally with self-employment.

Let us find the perfect umbrella to handle IR35 for you. It’s the Greatpay way!

Umbrella companies are popular amongst contractors because they’re able to take the weight of paperwork and admin from their shoulders, allowing them to focus solely on their work.

The right umbrella company, too, will be extremely experienced in all things IR35, will be able to handle determinations for clients and handle all necessary client-side paperwork.

The right umbrella company will be able to use that knowledge of IR35 to help contractors in other areas of their lives, such as applying for a mortgage and all the stress that brings.

Not all umbrella companies are created equal, though. Greatpay is here to help – let us find the right umbrella for you to guide you through the IR35 process. Contact us for more information.

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