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IR35 Northern Ireland
Is Your Business Ready For HMRC’s Newest Weapon?
The IR35 legislation was introduced to prevent contractors and businesses from evading tax payments or by working on a self-employed basis to ‘disguise’ their true employment status. IR35 Northern Ireland affects all contractors who do not qualify to meet the HMRC’s definition of being ‘self-employed’.
On 6 April 2021 the government introduced reforms to their weapon known as the IR35 legislation. These upcoming changes mean that:
- Medium and large sized businesses are now responsible for calculating the contractor’s employment status
- Contractors can dispute the decision if they do not agree with it and should be given reasons as to why this decision was made
- Small businesses are excused from the changes and if a contractor does not get an employment status from their client then they must work out their own employment status
Inside And Outside IR35 NI
Contractors can either be inside or outside of the IR35 legislation. Being ‘inside IR35’ means that you are seen as your client’s employee for tax purposes and are subject to PAYE. This differs to ‘outside IR35’ which means that you are running as a genuine business and are outside of the IR35 rules.
Changes to the IR35 legislation have not ended contracting through a limited company. By joining an umbrella company contractors will have the freedom to work in projects that are outside of the IR35 rules and they will still benefit from their wages.
At Corruda we are here to help you through these legislation changes. Contractors who join us will have their PAYE tax and National Insurance deducted from their salaries which is similar to being employed by a limited company.
Umbrella Contractor And IR35
Using an umbrella company when inside of the IR35 is something that business contractors should consider. This means that you can use their umbrella company for business payroll when needed and still have the freedom to return to your limited company when you are ready to do so.
When you join an umbrella company you are taxed as an employee. Each payslip your pay will be deducted for income tax, National Insurance and potentially student loan repayments and pension contribution. At Corruda we are a construction umbrella company that will act as an intermediary between workers and their recruitment agencies or end-clients.
IR35 Tax In Northern Ireland
Due to the recent legislation changes many contractors have decided to benefit from umbrella companies in recent months. At Corruda we specialise in the construction industry. Our team understands the importance of paying your employees right and on time without worrying about HMRC’S newest tax weapon. Let us take this worry off your shoulder and let us focus on your payroll while you work on the running of your business.
Can you afford the fine if HMRC decides your self-employed operatives are non-compliant?
Run your numbers through our liability calculator and see how big a risk you are taking.