IR35 and the private sector
What's happening in April 2020?
IR35 is a hot topic for contingent workers in the private sector at the moment. For those who don't know, the tax rules that were applied in the public sector a couple of years ago will be implemented in April 2020 for private sector contractors. These rules will see the transfer of responsibility for assessing the contractors IR35 status from IT contractors to the 'end user' if the end user is defined as a medium or large company .
Where the end user concludes that IR35 applies, the fee payer (which may be the end-user themselves, a recruitment agency, or other third party paying the intermediary) will be responsible for accounting for and paying the related tax and NIC to HMRC, including the additional cost of Employer’s NIC.
Who will be impacted by the new IR35 rules?
The new rules will apply to
(a) medium and large businesses in the private sector that are the end-user of the worker’s services,
(b) to the fee-payer, if different, such as fee-payers in the recruitment sector, and
(c) contractors providing services to medium and large businesses, and
Where the end-user is a small company, the PSC will continue to be responsible for assessing whether IR35 applies. The Companies Act 2006 defines a small business as a business with two or more of the following features:
- turnover of £10.2m or less
- a balance sheet total of £5.1m or less
- 50 employees or fewer
How does this impact Medium and Large Companies?
If your organisation carries out an IR35 investigation decides any of your interim workforce are within IR35 and you are running a department that relies on these skilled resources then there will be a significant impact on your delivery capability.
You will be faced with workforce changes, skills shortages, demands for higher day rates for those that remain and people exiting your business.
How Techolony can help those affected
Helping Medium and Large organisations
These businesses are the one's that are most concerned with the changes in April. They will have to decide whether their contractors supplied direct or via a recruitment agency will be inside or outside of IR35. For small businesses hiring contractors, nothing changes.
Techolony are an IT services provider and not a recruitment agency. We specialise in the designing, managing and delivering of IT projects by providing the people, processes, training and services in the areas of infrastructure and application change. Our services and teams, whether they involve five consultants or fifty, are offered in a service wrapper with milestone commitments, financial guarantees, service management guarantees and account oversight. Our teams will typically consist of a blend of our staff and Associate freelance consultants. Due to the many factors covering our contracts, services and ways of working, we naturally operate outside of IR35.
When you use Techolony's Consulting and Project services, you can be assured that you don't have to worry about the IR35 headache and you can be assured that we will deliver on our service commitments. If that wasn't enough, we offer our services at a price range that is more in line with a recruitment agency offering than to a consultancy. You really have nothing to lose and everything to gain in using Techolony as an IT delivery partner.
Helping Freelancers
When you freelance under Techolony, you are working as a white label supplier of IT services and will be hired for finite pieces of project work. Due to the size of our business, the decision about IR35 status rests with yourself. Your company is working under the same contracts that we offer our clients and we expect the same high standards of delivery and carry the same limited liabilities and risk. In return you will receive contracts that you can have independently evaluated and will confirm that your contract and services are outside of IR35. The difference between delivering services through Techolony and working through an agency is that our contracts and services were designed with client's IT outcomes in mind; working outside of IR35 is just an added benefit. A lot of recruitment agencies on the other hand are now working hard to create alternative contract solutions for their contingent workforce that remains risk free for them but will undoubtedly carry risk for contractors.
It is our opinion that freelancing through Techolony offers you the best of all worlds, true freelancing, access to multiple clients and exciting new projects, the ability to substitute your work and grow your small business services.
Our Promise
"We will provide our customers with value driven IT project services at competitive costs and with the utmost integrity. We will offer high performing and flexible ICT delivery teams with a contractual and governance wrapper that is designed to reassure, encourage collaboration and positive outcomes in the delivery of complex change within your business"
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Do you represent a medium-large organisation and wish to discuss our services further ?
Phone us today on 0161 209 3922 or register for a callback now. We look forward to hearing from you.
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Are you an IT contractor and want to read more about becoming an Associate and operating your services outside of IR35?
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