Understanding IR35

Are you sure about IR35 and its implications on IT Contractors in the London UK market? Read our quick guide or contact us for an appointment.

BE AWARE THAT THE HMRC ARE EXTENDING THEIR 2018 LEGISLATION IN THE PUBLIC SECTOR TO MEDIUM AND LARGE COMPANIES IN THE PRIVATE SECTOR IN APRIL 2020.THIS MEANS THE FEE PAYING CLIENT WILL BE RESPONSIBLE FOR ASSESSING A CONTRACTS IR35 STATUS, PRODUCING A STATUS DETERMINATION STATEMENT (SDS) AND IF INSIDE IR35 DEDUCTING TAX AND NATIONAL INSURANCE AT SOURCE PAYING THE CONTRACTOR NET FEES ONLY!

Unfortunately most contracts in the public sector are being advertised or assessed as caught inside IR35 and this is likely to be the case in the private sector post 2020. This means that you are likely to have to work through an Umbrella company rather than their own limited company (PSC) as there will be no benefit in using a PSC.

In July 2000 the Law known as IR35 Directive was introduced radically affected the operation of contractors working through their own limited companies. Primarily aimed at IT and Engineering contractors it significantly reduced income by increasing the tax and NI being deducted with only limited opportunities to offset expenses.

What is IR35?

Simply, unless deemed to be outside of this Directive you pay full tax and national insurance on the majority of your income or earnings regardless of your employment status. Only 5% of the revenue earned may be retained (and this is going April 2020) within your company and the remainder must be paid to the contractor with Tax and NI being deducted (meaning they/ you are no better off that a permanent employee, maybe even worse off).

We offer some exciting opportunities for contractors to improve/justify their position through managing and understanding their contracts, whatever their choice of contracting, by contracting with BITE. Our Contract Administration and compliance services.

Post IR35 Contracting

If caught by IR35 your contract will not provide you the traditional benefits of operating through a limited company.

This could mean that your Ltd. Company becomes an unwelcome expense and that new contractors to the UK will not find it cost effective to operate through a personal Ltd. Company. At best you are likely to be worse off unless you take positive steps to improve your personal circumstances.

This means either contracting through a limited company or umbrella company which BITE can provide

Or:

Attempting to ensure that your contract, when contracting via a PSC, takes you outside IR35 and using a contract administration service such as BITE’s. Ensure you receive your money via credit control services and bad debt insurance.

See our article on Public sector contracting post April 2017

Find out more about BITE Compliance – Send in your CV

More info on IR35

No Job no Training costs guarantee disclaimer: Under the 10 step job search program, we can’t help you get a job unless you regularly visit our offices, attend coaching and mentoring sessions, utilising the support provided to you. We work face to face with real people and you must work with us to help you. If then you don’t gain a job in the agreed time having attended the whole 10 step career coaching programme and used our job search database correctly we won’t charge you a penny and will refund the cost of any training you have undertaken that we have advised you to invest in!

The Three Day CV  Personal Brand Plan does not carry a no job no training costs guarantee.

However If you purchase one of our training modules separately, attend and are not satisfied with it we will refund your money.

However If you purchase one of our training modules separately, attend and are not satisfied with it we will refund your money.

BITE Compliance covers: IT Contracting London UK, IT Consulting London UK, IT Contract work London, IT contract Jobs London, Temporary IT work in London, Temporary IT Jobs in London, working with Freelance Interim Consultants for professional jobs and IR35 and Limited company or PSC Compliance services.

BITE also offers: Contractor marketing and advertising services, CV Marketing services,  with how to write an IT Contract CV to produce a Killer contract CV with, IT CV templates and IT CV examples. Your Jobsearch in our London office provides access to the hidden contract job market, career coaching for contractors, and contractor career management services .

BITE is not a visa or employment agency.