The IR35 Opportunity for Small Businesses

about 4 years ago by Charlie Wood
Small Business 770 X 461

If there was any doubt, following the budget announcement yesterday, it’s clear that the changes to the Off-Payroll worker rules are going ahead on the 6th of April.

Barring any small last minute tweaks, (like the announcement last month that the changes will now apply to any work done from the 6th onwards rather than any payments made from the 6th), it’s unlikely that there will be any surprises in the legislation.

With so little time left (5 weeks’ and counting), Medium and Large companies should have a handle on how they are implementing the changes and will hopefully have completed assessments of any current contractors on site and due to be engaged following the 6th of April.

For those that haven’t, there is still time but the clock is ticking! If you would like any support with the assessment process please get in touch.

But what of Small companies?

The proposed changes to the off-payroll worker rules (IR35) apply only to ‘ medium’ and ‘large’ businesses, with an exemption for end-clients meeting two of the following criteria: no more than £10.2 million annual turnover; a balance sheet total of less than £5.1 million or no more than 50 employees. Where the end-client meets two or more of these criteria, responsibility for determining the IR35 status of a contract remains with the PSC and the changes do not apply.

That will be music to the ears of many Contractors whose working practices support an Outside determination but, due to companies no longer engaging with PSC’s or perhaps an Inside determination they disagree with, have suddenly found themselves caught inside the legislation and branded as disguised employees.

Now is the time for exempt small businesses to look at their long-term plans and consider the benefits of engaging with those experienced contractors.

Contractors are faced with limited choices; stop working through their PSC and work with an umbrella company / go PAYE, find an employer who is assessing the IR35 status of each individual , or work with small companies exempt from these changes.

Small businesses should view the upcoming changes as an opportunity to absorb some of the most talented contractors in their sector to drive their business forward.

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