Searchability’s Top 5 most asked questions about IR35.
1. Who determines whether I am inside or outside IR35?
From April 6th 2020 the liability for making the IR35 determination in the private sector shifts from the contractor to the end-user / end-client. The end-client needs to provide the status determination (inside or outside IR35) to both the contractor and Searchability.
2. How does the end-client determine whether I am inside or outside IR35.
There are a lot of tools currently on the market which are designed to help the end-client make a determination although many end-clients use the CEST tool that was designed by HMRC.
3. What happens if I am deemed to be outside of IR35?
Should the end-client determine the assignment is outside of IR35 then Searchability will pay your PSC without making PAYE deductions as you will still be classed as self-employed for the purposes of tax collection.
4. What happens if I am deemed to be inside of IR35?
If you are deemed inside IR35 you will be classed as ‘employed’ for the purposes of tax. Searchability will be able to advise you on an approved umbrella company list who will deduct PAYE from your pay rate. There may also be a charge from the umbrella company for using their services.
5. Are there any exceptions to the new rules?
If an end-client is a classified as a small business (Turnover no more than £10.2m, balance sheet does not exceed £5.1m and number of employees lower than 50) they do not need to determine the status and this would remain with your PSC.