https://www.ftadviser.com/your-industry/2022/09/23/mini-budget-ir35-will-be-repealed-from-april/

Will put the onus back on the contractor. Obviously will be cheaper for those hiring, but I guess the proof will be in what any revised compliance model looks like.

And yes, I know there is a mini budget thread, but I suspect this is only likely to be of interest to a smaller audience.

I read that as the risk (and cost) goes to the contractor i.e. We* are worse off because rather than knowing the situation up front and pricing accordingly, we are at risk of getting caught out with a large tax bill. I never had any issues but easily could have with some rolling contracts.

* not me any more as I’ve gone back to perm now but I did 10 years of Ltd Co consulting/contracting

It will be interesting to see what this actually means.

It used to be common in the NHS for consultants to do extra work through their private company and therefore enable siblings to take up paid work reducing the overall tax costs.

It will help with some of the NHS back log situation if Consultants are no longer tied in to IR35 that meant they couldnt act as a contractor.

It’s going to be tough for umbrella companies, that’s for sure!

It’s going to be tough for umbrella companies, that’s for sure!

How so?

If you’re going via an umbrella company you’re paying all the income tax and n.i. that’s due. All that’s different to permeant employee’s is you’re not on the actual payroll so don’t have redundancy, holidays etc, just a higher hourly rate that makes up for it. The only ‘perk’ with some of them you could do your own expenses, so you could claw some of it back by putting through mileage etc which you’d get paid from the gross amount and only pay the remainder as sallary.

Where was the onus prior IR35? Was it on the contractor/ltd company – ie completely back to how it used to be?
I only had 4 months outside IR35 and am now inside. I actually like being inside and not having the worry of tax and accountant. But that was probably becuase I wasnt used to being paid dividends and low tax + claiming expenses like most did.
Shame I closed my company down. However, no one has taken the name, so I can setup again.

If you’re going via an umbrella company you’re paying all the income tax and n.i. that’s due.

Aye right, anyone I’ve ever known to be working via an umbrella company has done so to dodge tax.

Many companies used to insist that contractors worked with them via umbrella companies. Nothing to do with the worker seeking to dodge tax.

One company I used to work for as staff used to do that with contractors and the ones that did go through an umbrella company were paying as much tax in a year as I was in about 6 to 8 weeks and as mentioned above they were on slightly more than I was.

I’m sure there are some that dont do it to pay less tax but I could confidently say that everyone that I’ve known use an umbrella company has done so for tax reasons.

When I did it there were umbrella companies that offered crazy tax schemes, but these were of dubious legality and I and most people I knew on the project I knew didn’t use those schemes. We went through umbrella companies just to make life easier. The accountants told us what to do and we did it. It wasn’t especially low-tax.

Most of my contractor friends only use umbrella companies when the roles are inside and it’s a stipulation by the end client.
The end client is no longer going to be determining status so won’t be enforcing inside status so there will be fewer contractors being mandated to use umbrellas.
So umbrellas will have fewer customers.
Simples
Obvs there’ll be some folk that choose to use umbrellas for outside contracts, bu the levels mandated will not be there.

IR35 is not being repealed, just rolling the rules back to what they were before they may end client responsible for determination of IR35 status.

In my view many (probably the vast majority) of engagements in the IT sector which are analyst/programmer type of roles will continue to be within scope of IR35, based on my past experiencing of engaging and managing contractors in the past. But now managers at the end client doing what I used to (and got out of management 🙂 ) will not get involved in determining IR35 status.

This is another “boost” for businesses rather than workers, as the worker takes the risk again.

I hate IR35 with passion. I have a boutique consultancy with a varied client list but still, if I do even a few hours work as a sub-contractor for a bigger consultancy, I end up going through an umbrella.

I’ve had to fill in huge numbers of forms, show that I’m a genuine company with PL, EL insurance, environmental, health and safety and modern slavery policies etc and even after all that then log in to some convoluted system to log a few hours of advice. Arrrgh.

I get that there have been some people working as contractors that should really be employees but the whole system seems to be undiscerning and the contracting out of decision making tends to funnel even the bona fide small businesses through umbrella agencies.