Vet Seekers has partnered up with Gorilla Accounting to offer free advice on the effects of the pending deferred IR35 changes that may come into effect in April 2021.In a nutshell:
What is IR35?
IR35 was introduced back in 2000 and is designed to protect against disguised employment. It is intended to prevent workers who would usually be seen as an employee avoiding tax liabilities by working through an intermediary, such as a limited company.
IR35 and Locum Work
IR35 is set to change in the private sector from April 2021. The original date was April 2020, but this has been deferred for 12 months to help protect the economy from the COVID-19 pandemic.
It is important to note that the rules around IR35 are no different after April 2021 and all that is changing is the responsibility for determining the IR35 status is moving from the contractor to the end client or agency.
How Will IR35 Affect You?
If you are found to be within IR35, you'll need to pay tax in the same way as employee, with all of your income from that particular engagement being taxed through PAYE, with income tax and National Insurance deductions applied.
However, it's also worth considering that it's not your company that is trading inside or outside IR35 and the status is determined on a contract basis, so it is possible that some engagements will fall inside, and some may fall outside IR35.
The main consideration is that from April 2021 the onus for determining IR35 status will fall on the end client or agency, not on you and if your contracts are outside IR35, they should continue to be so.
Get Specialist Advice
As a locum Vet or RVN, it's crucial that you get your IR35 status right from the get-go, so that you know exactly how much tax you need to pay and won't have any surprises later on.
Working to together Vet Seekers and Gorilla Accounting can help you with your accounting needs, provide free advice if you are working inside or outside IR35, so get in touch with them today on 0330 024 0406.