IR35 advice – if it looks too good to be true, it probably is!

22 November 2019

The CIPP, with its responsibility to guide and lead the payroll profession, has noticed that there has been an increase in the number of umbrella companies approaching businesses ahead of the IR35 / off-payroll working rules that will be introduced in April 2020.

This is a key topic at present, having received much attention and being placed at the centre of many discussions and debates. A growing number of contractors and their engagers are concerned about the effect that the new rules may have, which could potentially leave them vulnerable and open to suggestions that they would not normally consider. As when the legislation was introduced in the public sector, there has been a surge in umbrella companies approaching businesses and offering advice around maintaining the earnings levels of contractors and to keep employer liability charges low. Businesses should be wary of following any of this advice.

There have been several reports of unscrupulous umbrella companies suggesting that contractors could be paid partially via payroll to satisfy the new laws, but then could have the remainder of their pay via a loan scheme. There are others who appear to be promoting travel and subsistence schemes.

Within the payroll sphere, if anything appears too good to be true, then it more than likely is, and this is a sentiment that ripples through all aspects of payroll. Businesses should be cautious of entering into this type of arrangement and consider seeking legal advice if they are at all unsure.

CIPP comment

The CIPP is aware of the implications that the new IR35 reforms will have, both on contractors and their end engagers. To help individuals prepare, we are offering both a webinar and a half-day training course providing information on the topic. The next webinar is running on 9 December 2019 and the next available course is being held on 11 December 2019 in Manchester.


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