Managing payments after IR35
The second in the series on IR35, we look at payments for contracts inside IR35.
Managing payments appropriately
From April 6th, if a contract is deemed ‘Inside IR35’ you will be responsible for deducting all appropriate taxes at source and passing them through to HMRC. It is imperative that you have the right tools and processes in place to make this as seamless as possible and keep your business on the right side of HMRC’s guidelines.
There are a number of ways to manage an inside IR35 payment.
- Put the freelancer on your payroll - this creates a lot of internal hassle and adds to head count.
- Ask them to go via an Umbrella company - you need to do your due diligence on the umbrella company, are they compliant. And you could be reducing your talent pool.
- Work with a compliant payment partner who can ensure all deductions are made and passed to HMRC whilst the freelancer still works via their PSC.
It can be a minefield, but you must ensure you have a compliant method for deducting tax at source and passing it through to HRMC.
What option is best?
YunoJuno’s end to end solution gives you the flexibility and protection to continue working with your freelancers in what ever way you both want, ensuring your tax obligations to HMRC are met and removing the headache of compliant payments.
Our IR35 Management tool - IR35 safe will help with your payment needs.
- Inside IR35 HMRC complaint deductions.
IR35 management and protection by experts
IR35 Safe by YunoJuno is the end-to-end IR35 solution created by the UK's largest provider of premium freelance talent. With IR35 Safe, companies can hire freelancers with confidence as well as manage all compliance issues on an easy-to-use platform. Collaborating with experts in tax, legal, finance and human resources, IR35 Safe delivers what your organisation needs to get in front of HMRC’s legislative changes.
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Check out the final article in this series:
Insurance - protection for the now and in the future
The IR35 Safe tool not only insures classifications during the time of the engagement, it is backed by Zurich Group with a 4 year coverage post contract completion.
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Check out the first article on assessments:
Secure the best assessments.
To do the assessment you need to think carefully – it has more to do with working practices on the ground than contract terms but there are a number of factors that need considering. Being appropriately prepared will save your business time, money and keep you on the ride side of HMRC.
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| Aspect | Employee | Independent Contractor |
|---|---|---|
| Control and supervision | Direct control over how, when, and where to work | Freedom to set their own schedules and methods |
| Payment | Regular wages; taxes withheld by employer | Paid per project; responsible for their own taxes |
| Benefits | Health insurance, retirment plans, paid leave | Must arrange their own benefits |
| Termination | Often requires notice and may include severance | Can usually be terminated at any time without benefits |
| Tools and equipment | Provided by the employer | Typically use their own tools |
