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IR35 Tax Legislation: A Quick Guide

Important IR35 tax legislation changes are taking place on 6 th April 2017 and they could affect you. Be prepared. Here are our 5 top things you MUST know.

  1. IR35, also known as the ‘intermediaries legislation’, is a set of rules designed by HMRC to ensure that people who offer their services to a client via an intermediary, such as a limited company, pay the same tax and National Insurance as people employed by the client to do the same job on a salaried basis.

  2. When the changes take place, if you deliver services to a public sector organisation, such as the NHS, and your contract falls ‘within IR35’, your recruitment agency, or the NHS Trust or Health Board you’re working for, will deduct tax and National Insurance contributions from your fee and pay them directly to HMRC.

  3. The NHS Trust or Health Board that you’re working for determine which contracted roles are deemed within IR35. To date we have received communication that all NHS assignments will be “inside of IR35” and therefore will be subject to the legislation.

  4. Tax and National Insurance contributions will be deducted from all payments made to PSCs (including limited company contractors) for assignments in the public sector from the date of the legislation changes – 6 th April 2017.
    Please note: Deductions will not be taken from payments made to umbrella companies.

  5. Talk to your accountant and an umbrella company representative as soon as possible to ensure you’re prepared for the changes. You may wish to alter your working arrangements to minimise the impact of the changes. You may find the links on our “changes to my pay” page  very useful.

 

Want more information on IR35? Read our detailed IR35 FAQs »

Want even more information than that? Contact our dedicated IR35 Support Team on 020 7940 6280 who will be happy to answer any queries or concerns you might have.

We look forward to supporting you through these changes.

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Important IR35 tax legislation changes are taking place on 6 th April 2017 and they could affect you. Be prepared. Here are our 5 top things you MUST know.

  1. IR35, also known as the ‘intermediaries legislation’, is a set of rules designed by HMRC to ensure that people who offer their services to a client via an intermediary, such as a limited company, pay the same tax and National Insurance as people employed by the client to do the same job on a salaried basis.

  2. When the changes take place, if you deliver services to a public sector organisation, such as the NHS, and your contract falls ‘within IR35’, your recruitment agency, or the NHS Trust or Health Board you’re working for, will deduct tax and National Insurance contributions from your fee and pay them directly to HMRC.

  3. The NHS Trust or Health Board that you’re working for determine which contracted roles are deemed within IR35. To date we have received communication that all NHS assignments will be “inside of IR35” and therefore will be subject to the legislation.

  4. Tax and National Insurance contributions will be deducted from all payments made to PSCs (including limited company contractors) for assignments in the public sector from the date of the legislation changes – 6 th April 2017.
    Please note: Deductions will not be taken from payments made to umbrella companies.

  5. Talk to your accountant and an umbrella company representative as soon as possible to ensure you’re prepared for the changes. You may wish to alter your working arrangements to minimise the impact of the changes. You may find the links on our “changes to my pay” page  very useful.

 

Want more information on IR35? Read our detailed IR35 FAQs »

Want even more information than that? Contact our dedicated IR35 Support Team on 020 7940 6280 who will be happy to answer any queries or concerns you might have.

We look forward to supporting you through these changes.