Changes to the IR35 legislation for Ltd company contractors

If you are a contractor working through your own Limited company you may already be aware of the change to the law which takes effect from 6^th April 2020. The change means that the individual contractor (Ltd company) will no longer be responsible for determining if the role they are undertaking is inside or outside the IR35 legislation. This will be determined by the end client, unless the end client is deemed a small business.

For roles deemed inside IR35, the organisation that pays the Ltd contractor will be required to deduct the following from the Ltd’s invoice:

• personal tax
• personal NI
• employers’ NI
• apprenticeship levy

You can find out more about the changes at https://www.gov.uk/topic/business-tax/ir35

Due to these changes, from 6^th April 2020 Stopgap will be processing ALL temporary candidates working for a medium or large sized client as PAYE.

We already have a smooth and efficient PAYE payroll process in place, used by most of our temporary workers where the client asks us to pay the candidate on their behalf, so the transition will be straight forward.  

If, however, the end client is deemed a small business then the new rules do not apply and we will be able to pay a Limited company candidate from their invoice with none of the above deductions being made.

When talking to you about a role, our consultants will be able to advise you as to whether the client is medium/large and so a PAYE role, or if the client is small, for which we can accept your Ltd company invoice.

If you need more information or need to chat about the above please contact our Contracts Manager – Ian Haysom on 020 8334 1325 or email on ian.haysom@stopgapgroup.co.uk.