What are my IR35 options?

There are a few options available to you. However, the starting point is to learn the lessons from when the legislation was first enacted in the Public Sector – the main lesson being not to make blanket assessments on your contractor population. Each role should be individually determined. 

From this, businesses will need to assess their contractor population to determine if the roles are inside or outside of IR35, in addition to understanding the CEST (Check Employment Status Tool), and learning how this works, or if you will use an alternative CEST tool. 

Once you have completed an audit of your contractor population, you can determine what options are available to you: 

  • Deemed model 
    The contractor can remain a contractor and can remain as the director of their PSC (Personal Services Company), but for this particular assignment, is “deemed” inside of IR35, and the “fee payer” then has to withhold the appropriate taxes.   

  • Pay as you earn (PAYE) 
    Contractor can convert to become a PAYE engaged individual.  

  • Umbrella 
    The contractor becomes an employee under a reputable umbrella company, and the umbrella company withholds the appropriate taxes, thus mitigating IR35. You may well be engaging contractors through umbrella companies today.  

  • Permanent 
    Is there a portion of the contractor population that it would make sense to offer roles as full-time employees?

  • Remain outside of IR35 
    There will be a portion of the contractor population that will be deemed outside of IR35.  

  • Statement of Work (SOW) solution 
    If a piece of work can genuinely be delivered through milestone and deliverable based outcomes, then SOW is a viable solution. Our SOW Managed Solutions provide employers with a means to gain visibility, compliance and cost control over their services procurement spend. 
     

Find out whether a managed Statement of Work situation is right for your business