This topic is for all questions raised on our webinar “IR35 Legislation Changes - how will it affect you?”. If you haven’t already attended it, you can sign up here Webinar - IR35 legislation changes - How will it affect you? | Built Intelligence
What’s it about?
The delayed off-payroll working (IR35) rules for the private sector are due to come into effect in April 2021.
The rules will affect any private sector organisation which uses off payroll workers. Off payroll workers include contractors supplied by recruitment agencies and subcontractors paid under the Construction Industry Scheme (CIS).
Frances Lewis, Head of the Workforce Solutions practice at law firm, Osborne Clarke, has advised extensively on IR35 and will provide an update on the what the changes will involve and the likely impact on risk and working practices.
By the end of the session we hope that you will have a clearer view of:
- How and when IR35 will apply and to which supplies
- Interplay between IR35 and CIS
- The risks and how can you reduce them
- What you need to plan for and implement between now and next April
We are a small consulting firm of three partners and 5 staff. We provide QS and PM services mostly to public sector organisations. We sub-contract a lot of work to other consultants who have their own firms (that they have an equity interest in). Does the rule that classifies us as a small business mean that we don’t need to do anything about the new IR35 as the old rules apply and these other companies are the PSCs who are each responsible for compliance and not us? We don’t know how these individual consultants are paid but would expect it to be a combination of salary as Directors and dividends.
Response from Frances Lewis - Osborne Clarke
If the small consultancy supplies a consultancy services to its clients where it takes full responsibility for delivering a consultancy outcome, rather than consultants then it is likely to be the end user for IR35 purposes and the small company exemption will apply. If this is the case then the risk and tax liability will remain with the PSCs. If, however, the consultancy is as a matter of contract and fact on-supplying consultants and charging for their time rather than work product then this would change things – the consultancy’s client would be the end user client and the small company exemption will apply only if the end client is, itself, a small company. It’s not always clear who the end user client is and when we advise on these arrangements we typically look at the contract between the consultancy and its client to form a view. The initial question is usually: does the consultancy charge days rates per consultant or does it charge for the delivery of a project?
Who can work under the CIS scheme? can professional services be provided under that scheme?