Private Sector Contractors
When providing your services through your own limited company then it is your responsibility to ascertain whether you are working inside/outside of IR35 legislation.
Your Champion advisor will have explained IR35 to you in great detail during your initial consultation discussions and an Employment Status Indicator (ESI) form has been included within your welcome pack.
You should complete an ESI for each assignment you undertake and submit it to Champion along with a copy of the Contract for Services that your recruitment agency has issued to your company. The completed ESI and Contract will then be sent for the attention of our legal partners, Weightmans LLP, where it will be reviewed by a qualified employment law specialist. Weightmans LLP will then provide you with a comprehensive report to clarify their understanding of your IR35 status.
Public Sector Contractors
From April 2017, the responsibility to determine your IR35 status will fall to the public sector organisation you will provide services to.
If you are deemed to be outside of IR35, then you can enjoy the full financial benefits associated with running your own limited company.
If you are however deemed to be inside of IR35, then your recruitment agency will be required to deduct Income Tax and National Insurance contributions before they are able to make any payments to your business bank bank account.
Your public sector client is required to confirm reasons to support their IR35 decision and will need to communicate information to you and your recruitment agencies within 31 days of being asked for it. This will then allow you and your agency to agree/disagree with the findings. Failure to provide details within this timeframe will result in your client becoming responsible for all PAYE deductions.
HMRC have designed an online tool and are pressing public sector organisations to use it. It is important for you to know however that use of the tool is optional. Champion, in association with our legal partners Weightmans LLP, have designed a robust set of tests/measures/processes that, we believe, can better satisfy public sector organisations, recruitment agencies and contractors. Our involvement will help you to understand and fairly navigate the new rules.
NOTE – For the purpose of IR35 reform, a Public Sector Organisation means an organisation as defined for the purposes of the Freedom of Information Act 2000 and the Freedom of Information (Scotland) Act 2002.