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Off-Payroll Working Rules -Be Status Conscious, Get It Right !
Recently HW Associates have dealt with HMRC enquiries on behalf of several of our Hitchin ,Stevenage and Luton based clients regarding their application of the Off-Payroll Working Rules (IR35).
HMRC is currently gradually ramping-up its enquiries into possible breaches of the Off-Payroll Working Rules (IR35). These came into force on the 6th April 2021.
Does this affect you because if so we can help.
Are you a contractor working through a personal service company or an intermediary providing services to medium or large-sized organizations?
If you supply services to small clients nothing has changed. You will decide, as before, the employment status of either yourself or ,if an intermediary ,your workers.
Medium or large-sized client organizations are responsible for deciding the employment status of the worker. Companies are within the rules if two of the following three conditions apply: an annual turnover more than £10.2 million / assets more than £5.1 million/ more than 50 employees.
Unincorporated businesses, other than LLP’s, use a simple test which is to follow the rules if turnover is greater than £10.2 million.
Where IR35 rules apply, the worker’s fees are subject to Income Tax and NI. For a direct engagement the client is responsible for administering and collecting the tax and NI. If the engagement is through an agency, it is the agency that is responsible for operating PAYE.
If the organization receiving your services is within the rules they should give you, as a contractor, a Status Determination Statement. This will tell you as the worker or, alternatively, your agency the outcome of the determination and the reasons.
As a contractor you might disagree with your client’s status determination. If so you should bring this to their attention. After re- consideration, they must either uphold or revise the original decision, giving reasons. This must be within 45 days of the raising of the disagreement.
Help to organizations in deciding if the off-payroll working rules applies to their contractors is available from HMRC through its Check Employment Status for Tax service (CEST). http://www.gov.uk/guidance/check-employment-status-for-tax
If the client is neither resident in the UK nor has a permanent establishment here the off -payroll rules are not applicable. It is the contractor’s intermediary or agency that must decide if the rules apply.
Off-Payroll Working Rules -Be Status Conscious, Get it Right !
For further advice either, as a contractor or an SME organization, please call us on 01462 420042 or email to info@hw-associates.co.uk.
We offer a full range of services to SME’s : management and statutory accounts production, payroll, bookkeeping, business taxation, Vat returns, personal tax. We offer good advice to businesses in the Hitchin, Luton and Stevenage area. Please visit us at http://www.hw-associates.co.uk to see how we can help your business.