Contractor IR35 regulations; what you need to know.
The pandemic has seen a surge in freelance work, but understanding contractor IR35 regulations isn’t straightforward. Contract work has been a boon for many industries–facilitating high employment and flexible hiring–but new regulations that came into being on April 6th, 2021 have caused confusion for newbie contractors and employers (and quite a few established contractors and employers too).
IR35 was introduced over 20 years ago and was widely regarded as ineffective, the law underwent reforms—the first covering contractors working in the public sphere and, now in the private sector. With new rules in place, is your business ready for IR35?
Contractor IR35 regulations reform: Should You Be Worried?
IR35 regulations were updated in April 2021, after a year-long postponement. The new measures shift things around in a few significant ways, which affect both contractors and their clients. If you’re a contractor or your business depends on hiring contractors, that means you.
For some contractors, IR35 reform may not change things much. The new framework should be particularly familiar to those working within the public sector, which underwent similar reforms years ago. However, other contractors may have a very different experience with contractor IR35 regulations being subject to a lot of change.
Contractors who are reclassified as workers via IR35 likely face significant hikes in tax liabilities. Moreover, these decisions may not even be in their own hands, but rather, in their clients’.
Understanding IR35 Pitfalls & Woes
Under the new reforms, private sector contractors don’t determine their own worker status. Instead, the burden falls on their clients. Businesses must determine whether contractors fit the criteria for IR35 classification as employees.
A possible pitfall here would be companies choosing to ban all contractor work to avoid non-compliance. Another woe is the possibility of local businesses simply reclassifying all contractors under IR35 and the associated tax burdens.
Navigating these perils is hard enough for a company, but it can spell trouble for a contractor. That’s where IR35 accountants in Basingstoke, like HL&W, come into play.
What HL&W Can Do For You?
HL&W is the foremost accountancy practice for freelancers in Basingstoke and we have a deep understanding of every aspect of contractor IR35 regulations. If the new reform gives you a headache, contact Managing Director Cheryl Woolhouse (FMAAT) and her staff.
The team at HL&W has extensive experience with freelance contractor accountancy. Better yet, we offer fixed price packages for contractors, covering monthly bookkeeping and annual returns.
HL&W is the premier accountant in Basingstoke to help with contractor IR35 regulations; we’ll crunch all the numbers while you focus on your work. It’s the best way to ensure you and your, clients get a fair shake without risking non-compliance.