We take this term very seriously within the Recruitment industry as it is a tax legislation that can, at any time, effect the client and the candidate.
HMRC are tightening their grip on contractors who are ‘pretending’ not to be employees and IR35, in laymans terms, is a legislation designed to stop fraud when workers are claiming to be contractors for tax purposes.
The legislation challenges those who supply their services to clients via their own company therefore it is very important when you are a contractor to be sure that you’re fully IR35 compliant.
Key Point: IR35 is designed to stop those who act like and are treated like employees pretending that they aren’t.
The HMRC don’t appear to display the divide between contractors and employees very clearly, however, they do provide a variety of questions to help you in distinguishing your current status.
Basically, if you can justify your position, you wont be required to join the payroll as an employee.
The consequences of falling under IR35 can have significant financial penalties, if a contractor’s position within a company is seen as an employee to the HMRC, they still wouldn’t receive any bonus or benefits due to the fact that their employment by the company is provided by an external contract.
For more information visit the HMRC website - https://www.gov.uk/government/organisations/hm-revenue-customs
From all at Venatu Recruitment Group.
Posted: 29 November 2018
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