Over half of Limited Company contractors don’t understand IR35 reforms

(2 minutes to read)

From April 2020, the responsibility for determining IR35 status will shift to the end client – this means that SMEs within the private sector will need to prepare for knowing how to identify whether a contractor will fall in or out of the legislation.

With IR35 reforms to the private sector set to come into play in April 2020, there are a number of Limited Company contractors who still don’t fully understand the legislation details.

Surveying more than 1,000 contractors, the Morson Group found that as many as 54% of Limited Company contractors are unaware of the exact details when it comes to the looming IR35 reforms – including how to correctly determine whether a contractor will fall in or out of the legislation.

Phil Beardwood, compliance & assurance director at the Morson Group, said, “Some businesses believe that it’s the responsibility of the labour provider to determine the status of their contractor workforce, yet it’s down to the end client to conduct these reviews and ultimately make this decision, which may provide the answer as to why some contractors aren’t yet aware of the forthcoming changes.

“Uncertainty caused by the Brexit narrative and the Chancellor’s decision to cancel the Budget has led to some organisations believing that the forthcoming IR35 legislation reform will be delayed or even cancelled. This is certainly not the case and the new tax regime governing contractors will remain top of the agenda in the private sector. The countdown to comply is on, with those companies who choose to bury their head in the sand posing major risk to their operations.”

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Give us a call on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.

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Beardwood added, “We strongly recommend that end clients do not simply adopt a blanket approach as a quick fix to reducing their tax risk. Lessons learned from the public sector rollout means that those who do try to cut corners risk losing contractors to a competitor who may correctly deem the same individuals to be outside of IR35.

“Flexible workers are a major contributor to the UK economy and key to the country’s economic prospects, with many of our clients reliant on these ‘talent on demand’ workers, especially those operating in engineering, construction, IT, energy, aerospace, rail and defence. If we’re to preserve this vital workforce and remain competitive in a global marketplace, then it’s crucial to assess individuals fairly and on a case-by-case basis, and prevent them being wrongly placed inside, and vice versa outside.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.

Why Dolan Accountancy?

Dolan Accountancy was set up by Simon J Dolan, the man behind the well-known brand SJD Accountancy. With over 25 years experience in the contracting marketing, Dolan Accountancy has the heritage, reputation and credibility you can trust. Working closely with our sister company, Contractor Umbrella, it means we can offer one low cost, fixed fee package at £95 + VAT per month. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost. We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours.
  • Free use of Contractor Umbrella – With changes in Public Sector IR35 Legislation we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, Contractor Umbrella.
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams.
  • Free Access to FreeAgent – The founder behind the multi award winning FreeAgent platform was one of Simon’s first clients, therefore it only seems fitting that we offer all of our clients access to FreeAgent, free of charge.
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year.
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status.
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative.
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few.
  • Same day payments- We offer same day payments as standard providing funds are received into our account by 9am, for no additional fee.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795100 or email sophie.lewis@dolanaccountancy.com or jaime.thorpe@dolanaccountancy.com.

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