Home Business News How prepared are you for the new IR35 tax rules?

How prepared are you for the new IR35 tax rules?

by LLB Reporter
19th Feb 20 6:21 am

Less than one in ten (7%) of the UK’s freelancers say they are fully prepared for new tax rules due to come into force in April, according to new research from freelance career platform UnderPinned.

The looming IR35 deadline is a major cause of concern for the UK’s rapidly growing population of freelance workers, currently numbering more than two million. According to UnderPinned’s research, two in five (42%) have never heard of IR35, and one in three (32%) say the new rules are too complex and they do not understand how they will be affected. Together, that’s three quarters (74%) of freelancers who have no idea how IR35 will impact them.

April 6th 2020 sees the expansion of IR35, a piece of tax legislation which determines whether a worker is employed or self-employed, from the public sector to all businesses. This will mean that the responsibility for determining status will shift from the contractor to the hiring organisation. Experts say someone currently considered a contractor who earns £60,000 could be £6,000 worse off a year with the new rules.

For those aware of IR35 and its likely impact on their livelihoods, more than one in ten (12%) think that they will end up financially worse off as a result of the new rules.

Albert Azis-Clauson, Founder and CEO of UnderPinned said, “The introduction of IR35 to the private sector is lacking in both clarity and support. It seems counterproductive for HMRC to be charging people fines while they make little progress towards supporting or building infrastructure that could support the self-employed. The future of work is project based and the infrastructure needs to improve to reflect the changing nature of employment.”

Jetsun Whitton, Healthcare freelance copywriter and UnderPinned member said, “I’m concerned that many of the companies in my sector will end up putting a blanket ban on contractors, rather than taking the time to assess people’s IR35 status, which could massively impact on the opportunities for my business.”

UnderPinned was founded in 2019 to help freelancers find work, manage work and get paid, while building a sustainable and fulfilling career. The company’s Virtual Office helps freelancers to manage every aspect of their working life, from portfolio management to automated contracts, invoices and payments. The company aims to tackle the lack of infrastructure and support that exists for freelancers and it recently launched its full paid-for service.

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