When does IR35 generally apply?
It would apply if the contractor uses an intermediary to provide their services or labour and they would be deemed to be an employee or office holder for tax purposes if they were hired directly by the end user client rather than via the intermediary PSC. This would of course require an assessment of employment status for tax purposes.
Contractors who are not taxed in the UK and supply their services exclusively from outside of the UK are unaffected.
If IR35 applies, tax and NIC’s should be deducted under PAYE by the PSC. In reality this has not been happening so a major reform of the regime was due to be implemented in April 2020. The changes were postponed by one year and are due to take effect from 6 April 2021.
“Within IR35” means a contractor arrangement is caught by IR35 and the individual should be taxed as an employee.
“Outside IR35” means a contractor arrangement is not caught by IR35 and the contractor status is fine.
Related FAQs
Yes unless you are self-isolating, infected with Covid-19 or within a vulnerable group.
The Government has issued updated guidance on 13 May providing comprehensive advice to reflect the move to relax lock down restrictions and encourage house sales. The advice can be found here:
Key points to note
Unless you are self-isolating, infected with covid 19 or vulnerable, the guidance states that you can move house, provided you comply with social distancing measures at every stage, whether visiting a seller’s house or accepting visitors or professional for viewings, surveys and removals.
All businesses such as surveyors, estate agents and removals, linked to the housing market may now operate, provided that social distancing measures are observed and safe working procedures (see link below) are followed.
https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/homes
House viewing should be conducted virtually wherever possible, and open-house viewings should not be conducted. Houses should be cleaned before and after visitors come, and home owners should vacate during viewings and surveys to minimise the chance of contact. Doors and windows should be left open, and sinks made available for hand washing.
Agents can supervise, provided they maintain social distancing.
New homes show houses should be operated on an appointment basis, and cleaned between viewings, with hand washing facilities made available. Staff should adopt safe working procedures. Housebuilder sale-staff, tradespeople, fitters and NHBC inspectors can all attend to facilitate viewings, fit out, commission equipment and inspect completed homes.
Solicitors and Estate Agents remain unable to open their premises to members of the public, for the time being. Government guidance advises that solicitors adopt special covid 19 clauses to permit flexibility on completion dates where parties become unable to move or complete for reasons connected with the pandemic.
The Law Society in conjunction with other trade and professional bodies in the sector, has published links to pan-industry guidance on the re-opening of the housing market:
https://www.lawsociety.org.uk/news/press-releases/industry-issues-guidance-kickstart-housing-market/
The amount an insurer charges for providing cover is a critical aspect of the underwriting process. The premium must be sufficient to cover expected claims but must also take into account the possibility that the insurer will have to access its capital reserve –it is risk assessment based and the greater the risk, the higher the premium. Historically, insurers of high-rise buildings would have only had to prepare for a loss caused by damage to just a few flats within a building. That is because the design and construction of that building, with the right materials and fire safety provisions in place, should have limited the spread of fire and allowed the damage to be contained –or at least make this an extremely low risk. Now we know that many buildings have been designed, built and signed off in a regulatory system that an independent Government review has found was not fit for purpose. Premiums will reduce overtime but will be dependent upon the perceived level of risk reducing as the regulatory regime, BSA and BSR become more established.
The Government has introduced new regulations, which took effect on 14 May 2020, to relax the publicity requirements in respect of planning applications.
Planning applications are usually required to be publicised by way of site notices and local newspaper notices and applications are to be made available for public inspection. The Government has recognised that these actions may not always be possible in accordance with social distancing guidelines and in order that Councils do not delay applications as a result of an inability to comply with the publicity requirements, the Government has relaxed the requirements.
A Local Planning Authority is now required to “take reasonable steps” to publicise a planning application, which may be through use of online newspapers, social media, or other electronic measures. What is considered reasonable will depend upon the circumstances of an individual application and will be proportionate to the scale and impact of the development. A large development that has previously generated significant interest will require more steps to bring the application to the attention of all of those with an interest than a householder application. The guidance emphasises the role of the publicity requirements, namely to enable those with an interest to make representations and to effectively participate in the decision making process and therefore community engagement remains key. It is recommended that the officer’s report refers to the steps taken where a Council has relied upon the temporary publicity arrangements.
The requirement to make planning applications available for public inspection has also been temporarily suspended providing that the applications are available for online inspection. In reality most LPAs already provide such an online facility. Where individuals are unable to access an application online LPAs should make alternative arrangements, for example providing information over the phone or providing a hard copy set of documents by post.
The regulations however only amend the statutory publicity requirements. In addition to these, all LPAs are required to have a Statement of Community Involvement which may provide for additional publicity requirements and the LPA will be bound by these regardless of the temporary relaxation of any statutory requirements. Where a Statement of Community Involvement does go beyond the statutory requirements, the Government guidance suggests that LPAs update these to ensure that local communities can continue to be consulted in the current climate.
The regulations are currently due to expire on 31 December 2020.
The vast majority of disputes settle without ever reaching a final hearing with something in the region of 2-5% of all cases actually ending up in court at a final trial. So whilst it is very unlikely you would need to attend a court hearing, it is always a possibility.
An employee can refuse to attend work but their refusal to do so will have to be based on a reasonable belief that their health and safety is in danger. Whether or not their refusal is reasonable will take into consideration factors such as the employee’s own health and whether they are at a higher risk of becoming seriously ill if they contract Covid-19 and the steps their employer has out in place to mitigate the danger of contracting Covid-19 at work.
In such circumstances where the employee’s belief is deemed to be reasonable, they will be entitled to stay at home and receive full pay.
If an employee is subsequently dismissed for refusing to attend work in these circumstances, they may be able to bring a claim for unfair dismissal.