So with IR35 reform on the horizon - and with it the reality of not deciding your own tax status - here is how you could take the initiative with regards to IR35 reform.
Collaborate with your clients
The better understanding a client has of your IR35 status and the reasons why the service you provide is not ‘disguised employment’, the better the chance you have of being assessed fairly.
If your client has not been in touch to discuss the incoming changes with you, do not hesitate to contact them yourself with a view to getting a firm idea of how they plan to administer the rules next year.
Having worked at the forefront of the IR35 legislation since it was introduced nearly two decades ago, we speak from experience when we say that an open dialogue and joined-up thinking is key in ensuring IR35 status is administered accurately.
When advising businesses ourselves, we stress the importance of involving all parties in the supply chain in the IR35-decision making process. Contractors, as the key component in IR35, must be able to have their say too.
Speak with other contractors
When reform landed in the public sector two years ago, in addition to looking to protect the liability they now carry, clients made incorrect IR35 decisions because they did not fully understand the rules.
They were also perhaps naive in assuming that contractors would not mind being placed inside IR35 and taxed like an employee but without receiving any employment benefits for paying significantly more in tax.
By talking with other limited company contractors working with the same client and approaching your engager together, there is a reason to believe that these businesses will wake up to the seriousness of IR35 changes.
In our opinion, two heads are certainly better than one when highlighting the importance of having IR35 status reviewed fairly and expertly.
Have your contract reviewed
You need to be confident in your own IR35 status before you discuss it with your client and, should the situation arise, plan to challenge it in the hope of overturning what you see as an incorrect assessment.
Given that, at this moment in time in the private sector, contractors retain the right to set their own IR35 status, many independent professionals decide to obtain IR35 contract reviews to assist them.
By having your contract reviewed by an independent expert who has no financial interest in the outcome of your status, you will be well-placed to approach your client with the information when the changes are enforced next year.
