With the upcoming regulation changes to the IR35 legislation, Binks Overseas is here to help our clients understand these changes and to answer any questions they might have about IR35 or any other overseas payroll or tax issues.
Today, we are going to take a look at some of the most frequently asked questions that contractors have on the new IR35 regulations. While the following information is intended for general information and guidance only, you can contact one of our IR35 specialists to learn more.
Most Frequently Asked Questions That Contractors Have On The New IR35 Regulations
1. How is IR35 changing?
The new regulations are making ‘medium and large organisations in the private sector and all size organisations in the public sector responsible for assessing the employment status of individuals who work for them through their own limited company.’
2. What has changed or been expanded?
End-clients may now be required to pass on their determination to the contractor, rather than just the supplier they have the contract with as with the previous regulation. This means that all required parties in the chain must take responsibility for ensuring that:
- Determination has been made.
- Determination is passed down the chain to the fee-payer and the contractor.
- The appropriate tax and National Insurance Contributions NICs are paid.
3. How will the IR35 changes affect my current population of contractors?
Experts say that there could be a dramatic reduction in the number of contractors operating outside of IR35. Contractors currently operating through their own limited company, could begin to taking up assignments as Temporary Agency Workers, making them subject to PAYE deductions.
4. Can the contractors in my team continue contracting after April 2020?
Post April 2020, contractors in your team can continue contracting. IR35 could change the way they operate, for example, from working as PSC to a Temporary Agency Worker.
5. Will IR35 affect my budget?
As Temporary Agency Workers are subject to PAYE deductions (income tax and employee NIC) which are higher than the effective tax rates under the PSC structure, to attract and retain Talent there may be a need to increase the amount you are willing to pay contractors.
6. Does IR35 apply to contractors working under an umbrella company?
IR35 and the new regulations may apply to all contracting positions. Any contractors working under an umbrella company are already subject to PAYE deductions.
Contact Binks Overseas
To learn more about the new IR35 regulations, contact Binks Overseas today and speak with a payroll specialist who can answer any questions you might have about your company’s payroll needs.
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