Looking for information regarding IR35? Before April 6th 2017 Personal Service Companies were responsible for deciding if they were caught by IR35. As specialised Hackney accountants, we’ve gathered the following.
From April 6th 2017 the responsibility for assessing personal service companies for IR35 was moved to Public Bodies from the personal service company.
From 6th April 2020 medium and large companies will now take on this role and review the personal service companies that they contract to decide if they are caught by IR35.
To date the accuracy of the decisions made by the Public Sector is questionable. Will this improve with the private sector given the time pressures and lack of expertise involved?
If trading through a company whether you have been deemed by a Government department to fall under IR35, or you are making the decision yourself as the contracted company there are four main tests to consider:
Mutuality of Obligation (Can work be turned down).
Can a substitute be supplied?
Do you have Insurance.
The more tests that are passed the stronger the case for not being caught by IR35.
Even if you are not facing an arbitrary decision by the employing company, HMRC is and has been reviewing small companies with IR35 in mind for a considerable time.
For those companies and people caught up in this, the situation can be both traumatic and expensive. The case of Christa Ackroyd has made headlines because of her high profile and the amounts of tax claimed. In her case the Press says she was advised by the BBC to set up a company.
We understand that recently HMRC has stepped up its activity in the IR 35 area leading to more investigations and cases.
It appears that the television industry has been targeted and they are moving on to the Dental Industry.
Need more information or looking to get help from your local hackney accountants? Get in touch with us and we’ll be glad to assist.