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Tax threat from HMRC

AQR's webinar on the introduction of IR35 was billed as an attempt to inform members how it would affect clients and freelancers, but we now have an extra year to plan.

The potential for self-employment is just one of the benefits of a career in qualitative research. And the flexible workforce it provides has created an ideal business model for clients and freelancers alike.

Until fairly recently one of the main threats to our businesses was the impact that IR35 was likely to have on that working arrangement.

In the light of recent developments IR35 has been postponed, and will not come into force until April 2021, but with no real idea of how it was likely to affect me, nor what I could do to mitigate the impact, I decided to get ahead of the game and attend AQR's webinar IR35: The Good, The Bad and The Ugly run by Liz Norman and Louella Miles.

We were provided with a really helpful and succinct explanation of

  • Who IR35 would apply to (freelancers and contractors working for UK-based companies above a certain size, regardless of Ltd company status)
  • What it might mean (Hmm, being treated as an employee, and consequent fee reduction of up to 30%)
  • Why (because our clients will be responsible for meeting tax, NI and other obligations on our behalf)
  • And steps we could take to minimise its adverse effects (eg work through an umbrella organisation or form some kind of loose co-operative with lovely qualitative colleagues).

Really important learning for me was the three criteria which determine whether or not a role falls within IR35. These criteria, 'substitution', 'mutuality of obligation' and 'supervision, direction and control' are fairly complex, so I would recommend listening back to the recording if you are interested in finding out more.

I left the webinar relieved that we have another year to consider the implications of IR35, and feeling much better equipped to plan for its implementation.

 

Liz Holme
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