Working in IT post IR35

In this post we will be discussing working as an IT professional now the IR35 Legislation has gone through, and what this means for contractor jobs in the UK. Firstly let’s briefly restate how the IR35 legislation affects workers in the private sector.

  1. Most employers have taken a firm stance on this. As a result almost all contractors are deemed to be ‘Inside’ IR35
  2. As a result contractots are unable to work via their PSC’s (Personal service companies) / Ltd companies
  3. This means that they have to work via an umbrella company and are liable for employees and employers NI as well as PAYE and the umbrella companies weekly fee
  4. Another option is to work for the group on the books via a zero hour contract
  5. Most smaller firms will be deemed ‘Small businesses’ and therefore are exempt from the legislation. Therefore you are still able to use your Ltd company

Now we are clear on what it is how has the affected the UK market since April 6th 2021?

Firstly it’s increased the bias of locums wanting to work for smaller companies where they are outside of the legislation. Great news if you’re a boutique firm right ?

Many contractors have increased their daily rates to compensate for the increase in tax liability.  Some are leveraging this to rather exorbitant proportions causing a lot of discontent with employers having to foot the bill.

For more information check out the HMRC website.