IR35 reforms 2020: 16 of your key questions answered by our experts

IR35 reforms 2020: 16 of your key questions answered by our experts

 

LexisNexis, Radius Law, and Douglas Scott, have recently held two successful IR35 thought-leadership events in London and Manchester, with industry expertise from Haines Watts and EIC Insurance Services.

We have collated all of the questions asked by the attendees, and asked our panel of experts including Sandra Martins, and Andrew Hubbard, to provide us with the answers.

Read below to understand how the 'worker' is defined, what the Client's responsibilities are, key terminology, the Government legislation and more.

You may also want to see our IR35 overview: IR35 reforms 2020: What is changing and how can you reduce the risks?

 

1.  Who is who? – There seems to be a lot of confusion around the terminology used.

For the new IR35 rules to apply in the private sector, there must be a worker, who personally provides services to a client through an intermediary. The main characters, therefore are:

  • The worker: the individual providing the services;
  • An intermediary, which can be one of the following:
    • A company in which the worker holds more than 5% of the shares and of the votes; or
    • A partnership of which the worker is a member and:
      • The worker is entitled (alone or with members of the worker’s family) to at least 60% of the partnership’s profits; or
      • The worker’s share of the profit is linked to the payments under the contract with the client and the majority of the partnership’s income derives from the provision of services to a single client and its associates; or
    • An individual.
  • The client is the entity to whom the services are provided and is not a small business. This means the client will be either a non-corporate entity with an annual turnover of more than £10.2m or a corporate entity that satisfies at least two of the following:
    • Annual turnover of more than £10.2m
    • Balance sheet total of more than £5.1m
    • More than 50 employees

If a parent company satisfies the conditions above, then all companies

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About the author:

Sandra is the head of Radius Law employment department. She has over 18 years’ experience in advising employers and employees on all aspects of employment law. Sandra has specialised in employment since she qualified as a solicitor in 2001 after gaining a 2.1 in Law at the University of East Anglia and completing her Legal Practice Course with a Distinction. She trained at Steele & Co (now Steeles Law) and worked at different firms before joining Radius in 2016. 

She has particular experience of advising on TUPE (including in an insolvency context), providing specialist support on corporate transactions and guiding clients through restructures and collective redundancies, including information and consultation obligations. She also regularly advises both employers and employees on executive exits and settlement negotiations.

Sandra regularly represents clients in high profile tribunal claims. She recently led a team that successfully defended over 500 individual and 10 union claims (on behalf of 500+ members), which arose after a client’s acquisition of an insolvent business. This included TUPE, redundancy, unfair dismissal and discrimination claims with a potential liability of over £17 million. She works closely with HR departments, senior management and employees and provides practical legal guidance on all employment-related issues. Sandra is a member of the Employment Lawyers Association. She is fluent in Portuguese and speaks Spanish.