How much revenue does the IR35 generate for HMRC?
What’s changing and why now?
What does this mean for temporary workers?
What if I am out of scope?
That’s great news - continue as you are.
What options do I have if I’m in scope?
- Convert to PAYE.
- Convert to an umbrella company.
- Remain a limited company, which will require the client to adjust your tax and NIC to that of PAYE and pay your salary as net, not gross which is what currently happens.
- Leave the assignment and look for alternate employment.
Options 1 and 2 - Either you (if contracted directly) or your agency, will be required to renegotiate your contract with the end client.
Option 3 – This option has significant implications for the payroll of the end client or recruitment agencies. Current payroll systems are set up to pay gross salaries, however moving forward, all tax needs to be deducted at source and a net salary paid to limited companies. As this is a big change, some end clients may refuse to hire limited companies.
Option 4 - Nobody wants to see option 4!
Why isn’t IR35 the end of the public sector temp?
- In December 2016, UK public sector employment was at 5.436m.
- Central government employment was up 27,000 on the previous quarter at 2.975m – the highest since records began in 1999.
- Local government employment was down 24,000 at 2.153m – the lowest since records began in 1999.
NHS employment continued to rise, reaching 1.604m - the highest since comparable records began in 1999.
This material is intended for general information purposes only and does not constitute legal advice. Specialist legal advice should be taken in relation to specific circumstances.