How UK Businesses Can Prepare for IR35 to Minimize Their Misclassification Risk

Aug 15, 2019

Legislation around IR35 was introduced to the public sector several years ago but it won’t be until April 2020 that it will apply to private enterprises.

What will this mean for your business? Well, early next year, large private companies that utilize independent contractors will be responsible for ensuring that classification status is correctly aligned for each engagement. Under IR35 – if a freelancer, due to contract stipulations, should be identified as an employee, the business will be responsible for income tax deductions, national insurance contributions and more.

As the use of freelance work rises, the new reform may have a significant impact on businesses that rely heavily on contingent workforces in the United Kingdom.

In this article, I will outline how companies can determine their freelancer’s status under IR35, and how your company can prepare for the impending changes.

Will Your Freelancers Still Be Freelancers Under IR35?

To start, it’s important to understand that under IR35, it isn’t the individual worker that’s in question but rather the specific contract.

Therefore, it’s essential to understand whether contract parameters and terms, or the contractors specific arrangement constitute employment vs. a B2B arrangement. If the conditions align with an employment classification your contracts could get flagged by the new legislation.

Read the full article on how best to prepare for IR35 at Spend Matters:

Martin Konrad

VP Marketing