Keystone Employment Group

Employed or self-employed? 

From the 6th April 2017 there is a change in legislation (IR35) which may affect your Employment Status working as a contractor.

What is IR35? - IR35 is tax legislation that is designed to combat tax avoidance by workers supplying their services to clients via an intermediary, such as a Limited Company, but who would be an employee if the intermediary was not used. 

Such workers are called 'disguised employees' by Her Majesty's Revenue and Customs (HMRC).

How does this affect me now? - In order for us to continue to pay any work carried out after the 6th April under your Ltd Company you will need to complete the online HMRC Employment Status Indicator tool(ESI).This ESI will identify your Employment Status for the assignment offered, and determine if you can continue to work as a contractor via your own Ltd Company. You will have to complete ESI for every assignment that is offered.

What happens if the IR35 legislation applies to me? If the IR35 applies you have to decide on 2 options.

- option 1 - We pay you as a PAYE worker. This means we deduct the relevant Tax and National Insurance contributions on a weekly basis.

- option 2 - You can sign up and operate via an Umbrella Company which offers many financial advantages if you are a professional employed on both long and short-term contracts. For more information please click here .

What happens if IR35 does not apply to my assignment? - You would need to save the results of your Employment Status and send it to customer services We will then need to see your LTD company documents and set you up on the system as a limited company contractor, this would enable you to enter online timesheets for the assignment.