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IR35 Support
HMRC's IR35 legislation gives organisations a great deal to understand and navigate - with clients and contractors needing to confidently know their way around this crucial topic to ensure compliance.
IR35 off-payroll working
IR35 is used by HMRC to identify whether contractors are genuinely working independently from their End Client, and not being treated the same as directly employed personnel. IR35, also known as 'off-payroll working', was introduced by HMRC in April 2000 initially in the Public Sector, intended to combat tax avoidance.
We’re committed to compliance, for us this means working with our clients to support them with their approach to IR35. To help our contractors understand what IR35 means for them, we’re also ensuring they have access to the latest information.
Helpful resources
Late 2023 HMRC shared practical guidance to help organisations understand several areas of IR35, in particular what they would be looking for if they were to open an investigation to check compliance. Our Linx business, part of the NRL Group, have reviewed this documentation and put together a whitepaper that references the main sections that organisations need to be focusing on – together with their key finding, which you can access below.
Looking for a long-term solution to ensure IR35 compliance?
If your organisation is looking for support to ensure workforce planning continues to drive IR35 compliance, then our sister company Linx can help.
Part of the NRL Group, our Linx workforce solutions experts support clients to ensure that as their business operations evolve they continue to remain compliant. Including developing supply chain auditing solutions and hiring manager training programmes.
Supporting you with IR35
We’ve received lots of questions from our clients about IR35, each wanting to ensure they apply the legislation compliantly.
What does this mean for my company?
As the End Client you will have a responsibility alongside the fee payer, often the recruitment agency, to assess whether externally contracted workers are deemed to be disguised employees and as such fall in-scope of IR35.
What is a Disguised Employee?
A ‘Disguised Employee’ is a contracted worker who fills a position in a company and works under terms that would make them an employee but doesn't pay the corresponding income tax and National Insurance contributions (NIC) that an employee would.
Put simply, if the engagement between the contractor & end client looks and feels like employment - then they will most likely be classed as a disguised employee by HMRC and deemed in-scope of IR35.
How can I tell if a contractor is a Disguised Employee?
It's crucial that processes are developed to fully assess contracted workers to identify whether they fall in or out of IR35 scope.
HMRC provides a tool to assess individual scenarios, but if challenged a fully auditable trail must show reasonable care has been taken to determine a contractor's IR35 status.
What is reasonable care?
The IR35 legislation expects individual status determinations to be made on each contractor assignment – identifying whether they are required to pay tax and National Insurance Contributions.
If HMRC challenge your determinations, they will be looking to see that reasonable care has been taken to come to this decision – such as adequate staff training and comprehensive processes to show due diligence.
How is IR35 status determined?
There are a variety of areas the legislation considers that affect an IR35 status determination, including – Right of Substitution; Financial Risk; and Supervision, Direction and Control.
We know that although contractors won’t be the ones making the IR35 status determinations, you’re still left with a lot of unanswered questions. Take a look at the answers to some of our frequently asked questions.
What is a Disguised Employee?
A ‘Disguised Employee’ is a contracted worker who fills a position in a company and works under terms that would make them an employee but doesn't pay the corresponding income tax and National Insurance contributions (NIC) that an employee would.
Put simply, if the engagement between the contractor & end client looks and feels like employment - then they will most likely be classed as a disguised employee by HMRC and deemed in-scope of IR35.
What does this mean for me as a contractor?
The legislation specifically challenges those people who supply their services to clients via an intermediary, often know as a Personal Services Company (PSC), who in the eyes of HMRC would be considered to be a 'disguised employee' if they are not deemed to be out of scope for IR35.
How will the End Client determine IR35 status?
HMRC provides a tool to assess individual scenarios - but if challenged a fully auditable trail will be needed, showing reasonable care has been taken to determine a contractor's IR35 status, known as the Status Determination Statement.
It's important to remember that each assignment should be assessed separately, as working practices may vary.
Can I submit my own status determination?
No - whilst you can undertake your own IR35 assessment in preparation, the legislation requires the end client to complete the official status determination.
Can I dispute an IR35 status determination?
Yes, of course. If you feel the status determination given by your end client does not accurately reflect your working relationship, then you can lodge a formal dispute. The end client will have 45 days to complete a disagreement process and report their findings back to you.
Should IR35 deter me from contracting?
Not at all - it's important to remember that HMRC only expects one-third of contractors to be impacted by IR35. Whilst clients may need to review how they engage contractors, there are simple changes you can make to help ensure you are not deemed to be inside the scope of IR35.
We'll be working with our clients and contractors to ensure they understand what changes they'll need to make - but make sure you sign up to receive NRL's latest updates to stay informed.
If you're looking for more information on IR35, you may find our blog archive helpful. Click below to see the articles we've posted about IR35.
Visit our IR35 blog archive
NRL provide an excellent service, that I would recommend to anyone looking to secure the right skills for their business.
Peter Williams
Workforce and IR Leader, Exyte Hargreaves
The NRL team have supported our Power Engineering Services business since 2015, as a trusted partner to help ensure the successful delivery of our critical projects. Their ability to recruit a range of highly skilled engineering roles, and provide compliant contractor payrolling, means we can rely on them to secure key roles to support our project teams. Understanding the demands of our projects, they arrange all necessary travel and accommodation for contractors – as well as supplementary equipment such as rigging, tools and PPE.
Paul Hillary
Paul Hillary, General Manager Power Engineering Services, Uniper
