For those who might be impacted by the IR35 employed versus self-employed argument. We thought we’d get straight to the point; unlike this legislation as this might not impact you directly but could impact you indirectly or other people you know. We’ve summarised this below:
The way in which people are categorised as being either employed or self-employed and the obligation to make this assessment as well as potentially meet any costs of getting this wrong will extend from just the public sector to the private sector as of 6 April 2020. The one exception to this rule is where this applies to small companies for which all of our clients are, so it would be in respect of engagements where they are working for other companies that themselves are not small.
It is not currently expected to have the impact that the previously legislation back in 2017 had when it was first introduced to the public sector where; it is believed in many cases was out of fear, over 60,000 people were re-categorised as being employed rather than self-employed with limited challenge.
From this first batch of individuals that suffered at first hand there are six high profile cases that have went to court with two of these cases yet to reach a conclusion. For those four settled to date, HMRC has only won the one so it is expected that following the findings of the remaining two cases along with the dust settling over the coming months that further clarity will be forthcoming. The general consensus however is that the impact will be nowhere close when it hits the private sector; particularly given the findings and court cases that followed the initial introduction back in 2017.
We do however; as a firm, recommend that all clients seek legal/HR advice regarding this matter as this is outside our area of expertise and can only comment generally.