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How to Continue Delivering Projects in a Post IR35 World

Implemented on 6th April 2021, the changes in tax legislation within the United Kingdom for contractors, clients and their intermediaries means those within the industry are needing to educate themselves on IR35 and the challenges ahead. Below, the team at Ntegra explain further what the new rules are, who the rules apply to and how we can help.

Are you ready for IR35?

If you are currently engaging contractors to deliver your projects, then IR35 will impact you.

IR35 is the tax legislation that has been put in place by HMRC that aims to identify whether a contractor working on an assignment for a company is truly a contractor or if they are an employee in all but name. If the contractor is found to fall inside IR35, then they are deemed to be a “disguised employee” and their income will be subject to PAYE tax and National Insurance.

What are the main determining factors?

  • Mutuality of obligation (Is the company obliged to offer that individual work and is the individual obliged to take it)
  • Right of substitution (Can the contractor substitute themselves to deliver the outcome)
  • Control (Is the contractor managed by the end client on a day to day basis)

If they fall outside IR35, they are deemed to be a business in their own right supplying services and can continue to operate via their Personal Service Company (PSC).

The changes in legislation mean that the end client will be:

  • Responsible for determining if an assignment or contractor falls inside or outside of IR35
  • Liable for non-compliance to the regulation
  • Responsible for ensuring all those contractors inside IR35 have PAYE / National Insurance deducted at source

Many private sector companies are taking the very conservative approach and making blanket assessments declaring all contractors inside IR35 or banning the use of limited company (PSC) contractors altogether. This is having a huge impact, sometimes resulting in a mass cutting of contractors, which consequently has a huge loss of talent for these companies and a big knock-on effect in their ability to deliver projects.

How can Ntegra help?

As an independent specialised technology practise, we can handle the complexity that IR35 presents to manage our dynamic workforce of both permanent staff and contractors. Whether contract roles are inside or outside of IR35, we can maintain the contractual and working conditions needed to access the most extensive pool of talented professionals. We back up these practices with robust and fair IR35 assessments and project management discipline.

The ability to operate inside and outside IR35 roles gives us the most comprehensive choice when resourcing our projects.  As a side-effect, it also provides our clients with an attractive alternative to engaging contingent workers through recruitment agencies. Rather than hiring against a role, our clients engage us for a solution, and we manage the complexity and resourcing accordingly. Some of these requirements can then be resourced with contractors operating outside of IR35.  Our clients acquire the expertise and capacity needed, mitigate interruption of their projects, and also offload some commercial risk.

Wanting to find out more? Contact Us

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