IR35 Changes in the Private Sector

From April 2021, the IR35 rules will be aligned with the public sector, meaning your client will be responsible for determining the employment status of the contracts it enters with you via your Limited Company.

The changes in Summary:

End Hirers will be responsible for determining the employment status of the contracts.
The way IR35 is assessed hasn’t changed, therefore if you are not captured by IR35 now, then you should continue being outside after April 2021.
Your End Hirer will provide you with a Status Determination Statement – this is a summary of the end hirer’s decision on IR35, which must be completed for each individual contract.
This statement will determine your tax position with the HMRC
If you are not captured by IR35 you can continue to work via the Limited Company – there will be no changes.

If you fall inside IR35 (captured), Brookson have derived a range of products to help you navigate this legislative change. Below are the different options;

Option 1
Our new proposition called FLEX

A new solution from Brookson which will allow you to seamlessly transfer between your Limited Company and Brookson’s Umbrella Solution.

Flex has been designed to allow flexibility in working through our Umbrella Solution (for any assignments captured by IR35) and through your Limited Company (for any assignments outside of IR35).

By using flex we have all your limited company and umbrella information available to us so we can make sure it is correctly reported via the Self-Assessment of which is included in your Limited Company all-inclusive service.

This service is also beneficial to you if you are currently disputing your Status Determination Status with your end hirer.

Option 2
Deemed Payroll

You can receive payment into your Limited Company as normal, however this will be the NET amount. The tax and national insurance will be deducted by your client, if they have the ability to do this.

This situation is ideal if you are working multiple assignments at the same time, where some are captured and some are not captured, by IR35.

Captured assignments will be taxed as PAYE^*, and any non-captured assignments will run as normal and you are able to withdraw dividends on this income.

^*How does this work? Funds are received into the business Net (after) Income tax and NI contributions. You can then withdraw this amount from your company as your salary.