IR35 – your key questions answered

IR35 – your key questions answered

 

The forthcoming changes to the off-payroll working rules (IR35) are a tricky area to manoeuvre.

At our most recent Senior Counsel series of events which focused on IR35, subject matter experts from LexisNexis, Taxation Magazine, Radius Law and from F-Lex legal, we were able to provide concerned in-house counsel with a place to learn more about the changes, share experiences and ask questions.

Our blog post ‘IR35 myth busting! 8 essential and practical tips for in-house counsel’ shares the key take-outs from the event.

In addition to the learnings from the event, our team has also created a raft of resources to support organisations navigate the complexities of IR35 below.

Where can I find more information about the IR35 off-payroll rules?

Practice Note: IR35—off-payroll workers is a comprehensive guide produced in partnership with David Smith of DLA Piper, covering issues such as:

  • precisely which ‘engagements’ are covered
  • the conditions that apply where the intermediary is a company
  • the ‘notional contract’
  • the requirements in relation to the status determination statement (SDS), and
  • the consequences where the off-payroll IR35 regime applies

As an end-client, what practical steps should I be thinking about?

Practice Note:IR35—off-payroll workers—practical considerations for the end client examines:

  • how to identify the end client (and the fee-payer)
  • how to approach the business’s overall stance on compliance obligations
  • ascertaining which engagements are affected
  • assigning responsibility within the business
  • dealing with the SDS obligations
  • contractual arrangements
  • relevant HMRC guidance

Our organisation will be a fee-payer under the IR35 off-payroll rules. What steps should I be taking?

Practice Note: IR35—off-payroll workers—practical considerations for the fee-payer examines:

  • how to identify the fee-payer (and the end client)
  • dealing with the SDS obligations
  • the ‘deemed direct payment’
  • contractual arrangements
  • payment practicalities
  • HMRC guidance

Also see our Checklist: Off-payroll IR35 regime for medium and large private sector entities—checklist.

Does a contractor who falls within IR35 then become entitled to rights under the agency worker regulations?

Rights under the Agency Worker Regulations 2010 depend on whether the worker in question falls within the definition of ‘agency worker’ in those Regulations. For further information on that definition, and the implications of protection under the Regulations, see Practice Note: Rights under the Agency Workers Regulations 2010 and Practice Note: Agency worker status.

Does a contractor who falls within IR35 then become a worker for employment protection purposes?

As with the IR35 regime generally, where the off-payroll IR35 regime applies, it operates for income tax and NICs purposes only. The legislation does not confer wider employment status on the individual and accordingly the individual does not accrue employment rights with the end client or any other third party in the relevant contractual chain.

However, the usual status tests will still apply. For further information, see Practice Notes: Worker status and Employee status.

Visit our subtopic on PSCs, IR35, MSCs and employment intermediaries for further content, including a new status determination precedent.

For further information on LexisPSL here.

 



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About the author:
Gloria is a Paralegal in the Lexis®PSL Paralegal Hub. She graduated in International Law and Globalisation from the University of Birmingham in 2019 and has been at LexisNexis UK since March 2020. She has experience working for US, UK and Italian law firms on a range of matters, including IP, financial services and IP law.