Due to a mismatch of earnings thresholds, basic rate taxpayers may unexpectedly come under the scope of the High Income Child Benefit Charge in April.

The Low Incomes Tax Reform Group (LITRG) has issued a warning to families that they may be subject to a tax charge when claiming Child Benefit due to a discrepancy between two earnings thresholds used by the Government.

This is because the High Income Child Benefit Charge (HICBC), which begins to be levied where either parent earns £50,000 or more, will no longer align with the thresholds for higher rate taxpayers, which means those paying the lowest rate of tax may now face new charges.

The higher rate tax threshold continues to rise each year, and while it currently stands at £50,000, this figure will rise to £50,270 from 6 April 2021.

The HICBC, however, has remained unchanged since 2013. Those found within the charge will see one per cent of the child benefit they receive effectively withdrawn via the charge for every £100 earned above £50,000. This means that those earning £60,000 or more lose all the benefit through tax.

The Low Incomes Tax Reform Group, part of the Chartered Institute of Taxation (CIOT), has said that the policy “no longer meet it’s original intent to only target higher rate taxpayers”.

It has suggested that the Government should compensate for inflation and rising wages by raising the £50,000 income threshold to at least £60,000. It also believes that the point at which Child Benefit is fully recovered should increase from £60,000 to £75,000.

LITRG believes that the structure of the charge encourages those liable for the tax charge not to claim Child Benefit, which may affect a claimant’s state pension record, as they potentially miss out on National Insurance credits.

It may also mean that children of those who aren’t claiming may not automatically get a National Insurance number when they turn 16.

To find out more about the Child Benefit Charge and how it works in practice, download our guide below.

At the start of lockdown in 2020, the news was awash with photos and stories of a group of goats who had taken over the streets of Llandudno in Wales.

Now more than 12 months on, the herd of Kashmir mountain goats are seen regularly in the streets of the small town, including at the local Primark.

Disappointingly for the goats, they can’t indulge in retail therapy yet due to the Government’s closure of non-essential shops during lockdown.

Nevertheless, the sight of around 15 animals trying to gain access to the store has kept the locals fascinated.

Will Roberts, a resident of the Welsh town who spotted the famous mountain goats recently, said: “I was cycling to work at 8am expecting to pass through an empty Parc Llandudno when I noticed the goats heading straight for Primark.

“It made me laugh so I stopped to take some photos. I think I counted 15 in total. ‘I thought I was getting accustomed to seeing them about but they keep managing to pop up in new and more surreal places.”

The goats, who usually live on the Great Orme headland by the Welsh seaside town, are now regular visitors to the quiet town, enjoying free roam of the deserted streets, climbing walls, eating plants and hedges.

Stories have continued to emerge throughout lockdown of the 120-strong heard getting caught in all kinds of places, including being found in queues for a barber and even inside a local hotel.

The goats are originally descended from Kashmir mountain goats that were given to Llandudno as a gift from Queen Victoria, and they continue to be a major attraction for the town.

In the year since the Chancellor, Rishi Sunak, delivered his first Budget to a packed Commons chamber in March 2020, more than 135,000 people in the UK have died from Coronavirus, there have been three national lockdowns, the economy has shrunk by 9.9 per cent and Coronavirus support measures have cost around £280 billion.

As a result, Government borrowing – the budget deficit – is expected to rise from a forecasted £55 billion to about £355 billion by the end of 2020-21. Meanwhile, national debt is already approaching 100 per cent of GDP at £2.1 trillion and could rise to 120 per cent of GDP during the first half of the decade according to the Office for Budget Responsibility (OBR).

The widely respected Institute for Fiscal Studies (IFS) warned late last year that around £40 billion of tax rises will be needed by the middle of the decade to keep borrowing down to £80 billion a year and debt down to 100 per cent of GDP, prompting intense speculation that they could come as soon as this Budget.

With the Conservatives having committed in their 2019 General Election Manifesto not to raise the rates of Income Tax, National Insurance or VAT, much of the speculation about possible tax rises was focused on Capital Gains Tax (CGT) and Corporation Tax.

At the same time, the Budget came against the background of a growing sense of cautious optimism. More than 20 million people have now been vaccinated against Coronavirus and, just over a week ago, the Prime Minister set out the Government’s roadmap out of lockdown.

In announcing the roadmap out of lockdown, the Prime Minister – echoed by various ministers over the intervening days – all but confirmed the Chancellor would announce further Coronavirus support for businesses and the self-employed at the Budget.

Then, at 10pm the night before the Budget, several major news organisations reported the same details of how the various Coronavirus support measures would be extended, leaving little doubt about what the Chancellor would say on the subject.

The question, then, as Mr Sunak rose to the dispatch box in a virtually deserted Commons chamber, was whether he would increase any taxes immediately or hold off until a later date.

• Economic outlook
• Coronavirus Support Measures
• Personal tax measures
• Business tax measures
• Spending announcements
• Conclusion

Economic outlook

The Chancellor began by noting the way that the Coronavirus pandemic has fundamentally altered our way of life and summarising the Government’s response to the crisis.

After promising to do whatever it takes to support people through the crisis, he said: “It’s going to take this country and the whole world a long time to recover”.

Turning to the economic outlook, the Chancellor said that the OBR is now expecting a swifter and more sustained recovery than it had expected in November, with the economy now expected to return to its pre-Covid level by the middle of next year – six months earlier than forecast.

However, he said that in five years’ time, the economy will still be three per cent smaller than it would have been, had it not been for the pandemic.

He said that growth this year is forecast to be four per cent, rising to 7.3 per cent in 2022, followed by growth of 1.7 per cent, 1.6 per cent and 1.7 per cent in the subsequent years.

Coronavirus support measures

Turning to the Government’s Coronavirus support measures, the Chancellor confirmed, as had been trailed, that the furlough scheme – the Coronavirus Job Retention Scheme (CJRS) – would be extended to the end of September 2021, continuing to pay furloughed workers 80 per cent of their usual wages, capped at £2,500 a month.

However, unlike the scheme as it currently operates, he said employers will have to contribute 10 per cent of a furloughed worker’s wages in July and 20 per cent in August and September.

Moving to support for self-employed individuals, the Chancellor said that 600,000 newly self-employed people would be eligible for the fourth round of the Self-Employment Income Support Scheme (SEISS) as people who have submitted a 2019-20 Self-Assessment tax return will now be eligible.

The fourth round of the scheme will once again provide grants worth up to 80 per cent of trading profits, capped at £7,500. Applications will open in late April.

He then announced a fifth grant worth three months of average profits. This will continue to pay grants at 80 per cent of usual trading profits capped at £7,500 for people whose turnover has fallen by 30 per cent, but it will reduce to 30 per cent of usual trading profits capped at £2,850 for people whose turnover has fallen by less than that.

The Chancellor also announced the extension of the £20 a week uplift to Universal Credit for people who have lost their jobs for the next six months.

Moving to direct support for businesses, he announced the launch of the Recovery Loan Scheme from 6 April this year to replace the Government’s existing Coronavirus loan schemes. The Recovery Loan Scheme will allow any business of any size to apply for a loan of between £25,000 and £10 million backed by an 80 per cent Government guarantee.

He said that new Restart Grants will also be launched in April, making one-off payments of up to £6,000 per premises for non-essential retail businesses and up to £18,000 for businesses in the hospitality sector and others that are reopening later.

The Chancellor confirmed that the current 100 per cent business rates relief for eligible retail, hospitality and leisure businesses will continue for three months to 30 June 2021. There will then be a 66 per cent reduction in business rates for these businesses until 31 March 2022, capped at £2 million for businesses required to close on 5 January 2021 and capped at £105,000 for other businesses.

Staying with the hospitality sector, he said that the VAT reduction from 20 per cent to five per cent on many goods and services in the hospitality and leisure sectors will now be extended from 31 March 2021 to 30 September 2021. It will then move to an interim rate of 12.5 per cent until it reverts to 20 per cent in April 2022.

The Chancellor also said that the Government will double incentive payments for employers in all sectors to take on apprentices to £3,000.

Moving to the housing sector and the property market, the Chancellor said the £500,000 Stamp Duty Land Tax (SDLT) nil-rate band will remain in place for a further three months until 30 June 2021. It will then fall to £250,000 – twice its normal rate – until the end of September.

He then moved on to announce a new mortgage guarantee scheme, beginning in April 2021. The scheme will offer a Government guarantee to lending offering 95 per cent mortgages on homes worth up to £600,000.

The Chancellor said that the measures set out in the Budget amount to a further £65 billion of Coronavirus support, bringing the total since the start of the crisis to £407 billion.

Personal tax measures

The Chancellor said that the cost of Coronavirus support and the impact of the economic downturn on tax receipts meant that borrowing would reach £355 billion this year and £234 billion next year.

Reiterating his commitment to sustainable public finances, he said it was necessary to take steps to get the public finances back on track.

The Chancellor said that the Income Tax Personal Allowance and Higher Rate Threshold (HRT) will increase in line with the consumer prices index in April 2021 but will then remain at this level until April 2026, cancelling planned increases in line with inflation.

He said that thresholds for Inheritance Tax, the pensions Lifetime Allowance and the Annual Exempt Amount for CGT will remain at their current levels until April 2026.

Business tax measures

Moving to business tax measures, the Chancellor confirmed the widely expected increase in Corporation Tax from 19 per cent to 25 per cent, which will come into effect from April 2023.

However, he also announced a new Small Profits Rate of Corporation Tax for small businesses with profits below £50,000 of 19 per cent, meaning they will see no increase. Businesses with profits of between £50,000 and £250,000 will see a tapered rate, while those with profits of more than £250,000 will pay the full 25 per cent rate.

The Chancellor moved on to say that the Government will extend the trading loss carry-back rule temporarily from one to three years. Loss-making unincorporated businesses and those that are not part of a corporate group will be entitled to relief for up to £2 million of losses in 2020-21 and 2021-22.

Those that are part of a corporate group will have caps on either £200,000 or £2 million across the group in each year.

He also announced a two-year temporary Capital Allowances Super Deduction of 130 per cent for main rate assets such as plant and machinery as well as a 50 per cent First Year Allowance for special rate assets.

Meanwhile, he said that the current VAT registration threshold of £85,000 will remain in place for a further two years from April 2022.

Turning back to the hospitality sector, the Chancellor announced that planned increases in the duties of spirits, wine and beer would be cancelled.

He also once again froze fuel duty.

The Chancellor also confirmed reviews of Research and Development Tax Reliefs and Enterprise Management Incentives.

Public spending

Moving to spending announcements, the Chancellor confirmed the launch of the UK Infrastructure Bank, based in Leeds, which will support investment in public and private infrastructure projects.

He said there would be an additional £1.6 billion to support the vaccine roll-out, £1 billion in local funding for towns, and a £375 million Future Fund: Breakthrough for highly innovative companies.

Again returning to the hospitality sector, he announced the launch of a £150 million Community Ownership Fund for communities to invest in assets such as pubs, theatres, shops or sports clubs.

Finally, he announced the locations of eight Freeports, subject to simpler planning rules, infrastructure grants and lower taxes. They will be at East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teeside.

Conclusion

Although most of the key Coronavirus business support measures had been revealed in advance of the Budget, the Chancellor confirmed that taxes will rise in the coming years, as had been widely expected.

As ever, what the Budget means for individuals and businesses will become clearer as more details of the specific policies are announced in the coming days and weeks.

It seems clear, however, that businesses and individuals are about to start meeting the costs of the Government’s Coronavirus support measures.

Link: Budget 2021

The new legislation is about to happen from 6th April. Any 11th hour deferrals as we experienced in March 2020 are very unlikely, so I have borrowed the American phrase for the annual message given by the President on the current condition of the nation. So, let’s look at the current condition of freelance contracting.

First the possible good news. To my surprise in the last few weeks, we are finding that some end clients seem to be sidestepping the new rules and issuing contracts now that go past April and paid on a gross payment, but without carrying out status tests to determine whether a contractor is inside or outside IR35.

I think that for these end clients, the commercial needs to engage contractors for projects may be what they are concerned about rather than the task risks the new legislation may bring.

As with any legislation, such as the COVID rules, the law requires popular consent. If people don’t keep to the rules, there is a limit on how much can be policed.

If Off-Payroll is not complied with by the consent of end clients to whom the penalties are aimed, then it will be very tough for the system to open loads of tax enquiries to enforce compliance.

The existing tax tribunal system is already clogged up as it is and specialist IR35 tax consultants are ready and waiting for new business to defend end clients in tax enquiries. That won’t make enforcement of the new legislation easy for HM Revenue & Customs (HMRC).

So that’s an optimistic bit of crystal ball gazing, but it’s impossible to know if that’s how things will play out.

Practically speaking, there will be many contractors who have or will be receiving a Status Determination Statement (SDS) advising them that they are inside IR35 and from 6th April, or in some cases earlier, will be considered deemed employees and subject to reduced rates and PAYE tax and NI deductions as employees – resulting in substantial reductions in net earnings. What are they to do?

1. If you have been given a deemed employee status, you will be offered choices of how to continue work. These will normally be PAYE agency, Umbrella or Deemed Limited. All of these will result in employee-style taxes. However, we have developed an excellent solution for clients continuing to use their own limited companies under the ‘Deemed Limited solution’ and would recommend this is the best method to use. It is the only method that will allow a possible reversal of tax paid if this unfair legislation is reversed in the future. Please click here to see our Deemed Limited Inside IR35 Guide.
2. Please always send us communications you have received from your end clients or agency to victor@cogentaccountants.co.uk. We have built up vast experience of how IR35 works and can try and help.
3. You can look for other work. As mentioned above, there are end clients who are giving out contracts outside of IR35 or IR35 neutral, paying gross invoices without deduction. If you can’t get a full-time contract, you may still get some small contract work, which will help to build up your income streams and may grow into a larger contract or other referrals.
4. We are seeing some clients get work with small company end clients (less than £10m turnover and other tests) or for wholly overseas (no UK office/branch) end clients. Both of these are exempt from the new legislation. So, you can actively look for work with small or overseas-based companies. At the moment, with Covid and travel issues, many such contracts are home-based without the need for travel.

There are likely to be more shifts and turns ahead and we want to be there to guide you in any way that we can.

So please stay in touch with us, so that we can help you at this time of momentous change in the freelance contracting world.

Many thanks.

Victor Korman
Managing Director
Cogent Accountants

The tax liability for 2019/20 was due as normal on 31 January 2021 and after HMRC concessions due to COVID issues, taxpayers now have until the 31 March 2021 to pay or agree a payment plan with HMRC to pay any outstanding tax owed to HMRC or automatic penalties will be due as follows:

HMRC will also charge interest from 1st February 2021 at 2.60% on any tax owing and on the penalties and charges incurred as a result of the late payment of tax owed.

Some taxpayers may be able to make a ‘time to pay agreement’ with HMRC, which could mean that a penalty is suspended. However, the taxpayer will become liable to the penalty if the agreement is broken.

As well as late payment penalties, there are also penalties for late filing of the tax return. For the year 2019/20 only, HMRC has confirmed an extension to the filing deadline from 31 January 2021 to 28 February 2021.

Tax returns submitted by 28 February will not incur the £100 late filing penalty. Automatic penalties for filing tax returns after 28 February 2021 are as follows:

If the filing is late by 12 months and the taxpayer deliberately withholds information, penalties will be based on their behaviour as follows:

• Deliberate and concealed withholding 100% of tax due, or £300 if greater.
• Deliberate but not concealed 70% of tax due or £300 if greater.
• Reductions apply for prompted and unprompted disclosures and telling, giving and helping.

* Subject to multi-penalty rule paragraph 17(3) of Sch FA 2009.

If you are concerned about meeting or having missed either deadline and fear being fined, please contact our Tax team – tax@cogentaccountants.co.uk – to see how we can help.

It is a very challenging time for landlords as they deal with the difficulties of COVID-19 and the associated eviction ban.

The restrictions and new rules on the repossession of residential properties were first introduced as a result of the original Coronavirus lockdown in March last year.

It was initially only intended to last three months but has now been extended several times to assist tenants who have been adversely affected by the pandemic.

The current ban on repossessions will now remain in place until 31 March 2021 in England and will make it difficult for landlords to recover their properties until later this year.

It is not surprising then that research by the London School of Economics (LSE) and Trust for London, suggests that the number of private tenants in rent arrears in England could treble in the coming year.

This could mean that more than 700,000 tenants and their landlords may get further into financial difficulty.

In response to the ongoing ban, the National Residential Landlords Association has said the Government is making the situation worse for landlords and tenants by allowing debts to mount up.

This is because, despite the eviction ban, the rent on properties remains due and so millions of pounds of arrears have accumulated on properties across the UK.

This has left many landlords in a difficult situation, where they not only face losing their investment properties but also their own homes due to being unable to cover the cost of buy-to-let mortgages.

Tenants and landlords are being asked to communicate with one another and discuss alternative arrangements and, where possible, tenants should continue to make rental payments to the best of their abilities.

With many of us indulging in a takeaway during lockdown, the number of orders is on the rise in the UK.

However, for one hungry student, her experiences with popular app Uber Eats left her bemused.

Illy Ilyas, from Ilford, east London recently ordered nearly £15 worth of food on the popular app to be dropped off at her home.

After placing her order – two burgers, chips and a chicken wrap – she got a notification via the app to say her food was on the way.

However, soon afterwards she got another notification from her courier saying: “Sorry love, ate your food.”

Not sure what to make of the message, Illy went back on the app to find a message that her food was delivered and she was asked whether she wanted to leave a tip.

Instead of rewarding the rider for eating her food, Illy got in touch with Uber Eats, who sent a replacement meal.

Speaking to The Sun, she said: “Maybe he was really hungry. I wouldn’t want to be the reason a peckish man gets unemployed in a pandemic.

“I found the whole thing funny. At least I know that the food was eaten. In the end, I got my food so I wasn’t fussed. This has never happened to me before.”

Uber Eats is yet to comment on the fate of the courier.

Any business that deferred VAT payments due between 20 March and 30 June 2020 as a result of the Coronavirus pandemic, must now consider how they will repay this outstanding tax.

They can choose from the following options in order to do this:

• Pay the deferred VAT in full by 31 March 2021;
• Join the VAT Deferral New Payment Scheme (VDNPS); or
• Contact HM Revenue & Customs (HMRC) to agree extra help to pay.

The VDNPS will remain open between 23 February and 21 June 2021 and will provide businesses with the option to pay deferred VAT in equal interest-free instalments.

Taxpayers will be given the option to make between two and 11 instalments to suit their needs (the length of repayment may depend on when a business joins the scheme).

Businesses that are already on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, will be invited to join the VDNPS in March.

Other businesses wishing to use the scheme will need to apply online. To use the online service, they must:

• Join the scheme themselves – agents cannot directly assist them;
• Still have deferred VAT to pay;
• Be up to date with their VAT return filings;
• Pay the first instalment when they join; and
• Pay instalments by Direct Debit (there are alternative payment methods for those without access to Direct Debit on request).

Before joining, businesses must:

• Obtain a Government Gateway account – if they do not already have one;
• Submit any outstanding VAT returns from the last four years;
• Correct any errors on VAT returns as soon as possible; and
• Make sure they know how much they owe, including the amount originally deferred and how much you may have already paid.

If a business decides to opt-in to the New Payment Scheme it will not affect its ability to request a Time to Pay arrangement from HMRC for other debts and outstanding tax payments in future.

Businesses who are unable to use the scheme or that need extra help repaying deferred tax must call HMRC on 0800 024 1222.

Businesses may be charged interest or a penalty if they do not pay the deferred VAT in full, opt-in to the VDNPS or seek additional help to repay deferred VAT by the deadlines outlined above.

The Government’s guidance on the VDNPS can be found in full by clicking here.

We are fast approaching the deadline for filing your Self-Assessment tax return which is Sunday 31st January 2021. Our last working day before the deadline is Friday 29th January 2021.

If you would like Cogent to prepare your tax return, please complete and return the Self-Assessment Tax Return Questionnaire for the tax year 2019/20 which was previously sent to you by email.

As we are close to the deadline, we cannot guarantee to complete the tax return to meet the deadline so it is important that you complete the questionnaire as soon as possible.

The standard charge, including VAT, for a basic tax return is £240 as we have passed the deadline to receive this service at a discounted rate. Please note, more complicated tax returns, where additional work or supplements are required, will be subject to additional charges.

If you have a second shareholder, they may also need to file a tax return even if they have not done so previously due to the changes to dividend tax from April 2018 on any dividends over £2,000.  If they would like Cogent to prepare their tax return, please download a second copy of the questionnaire for them to complete.

Please also be aware that if we have already prepared your tax return, this will not be filed until our fee has been paid and the tax return approved.

Outstanding Balancing Payments for 2019/20 and the First Payment on Account for 2020/21 are also due and payable by 31st January 2021 and interest will be charged on late payment.

STOP PRESS…
HMRC has announced that Self-Assessment taxpayers who miss the 31st January 2021 tax return deadline will not receive late filing penalties if their return is filed online by 28th February 2021. The 31st January 2021 payment deadline however remains. Taxpayers who do not pay any outstanding balance on their 2019-20 tax bill by 31st January 2021 will be charged interest from 1st February 2021.

New Off-Payroll (IR35) legislation is coming in on 6th April 2021

It now seems inevitable that the new IR35 legislation (with a new name of Off-Payroll) will be with us from April 2021. It was deferred at the 11th hour in March 2020 due to the Covid pandemic but regardless of the continuing pandemic and economic pressures, the Government has made it clear that there will be no further deferral.

Let’s look at what is changing…

From April 2000 when IR35 came in, the responsibility of seeing whether IR35 applied was up to the individual (Personal Service Company (PSC).

To deal with this responsibility, many contractors had IR35 assessments from specialist experts and this is how Cogent have advised our clients over the years.

From April 2021, the new Off-Payroll rules mean that it becomes the end clients’ responsibility to assess IR35 and carry the tax liability if they get the assessment wrong.

So, it’s not surprising that many end-client organisations are taking the easy way out and either saying that they will not engage with PSCs at all or getting IR35 assessments done either using the unfair and simplistic HMRC CEST test or a variety of other assessment tools.

However, in many cases, these IR35 assessments are turning in INSIDE IR35 results, as the organisations are being understandably ultra-conservative on any tax risk to themselves.

If an end client organisation turns out an INSIDE IR35 result, although the law allows for an appeal process, this is very unlikely to change the result and there is very little the contractor PSC can do.

This INSIDE IR35 result will mean that the end client/agency will deduct all payroll taxes from the payment including the Employers National Insurance part which will mean that the rate you have been getting will reduce by about 8% to allow for that and then that reduced rate will be taxed as an employee.

Overall, there will be a substantial reduction in net income from a well-run tax-efficient PSC of something like 25% (varying with different rates and individual circumstances).

SO, WHAT CAN YOU DO?

1. The new legislation does not apply to “Small Companies”. Defined as meeting 2 out of these 3 tests – less than £10.2m turnover, £5.2m assets or 50 employees. This test applies to the group rather than just the company. If you have or can get a contract with a small company then you can continue to be paid gross as now.

2. The new legislation also does not apply to a company with no UK connection. So not a UK subsidiary or branch office of an overseas company. So, a contract with an overseas company with no UK connection can be paid gross as now.

3. Get involved in discussions now with your end client on what they are doing about IR35 assessments. Focus on strong arguments you may have (see below – defending outside IR35 status) on why your company services should be considered to be outside IR35.

4. If you get an inside IR35 assessment, ask if you can continue to invoice through your own company, even though all taxes will be deducted. This method has been called “deemed limited” or “INSIDE IR35-PSC”. This is new and unfair legislation and the ink is barely dry. There may be changes ahead. If you accept work via agency PAYE or an umbrella company, from then on you are legally an employee with no reversal/refund possibilities in the future.

   However, if you continue to use your company, then the options of a reversal and refunds remain open. Cogent have developed solutions so ask your Cogent Account Manager about this and how it works.

DEFENDING OUTSIDE IR35 STATUS

IR35 is a mixture of employment law and tax law. It is quite complicated and easy to get lost in fruitless discussions around legal concepts on personal service, substitution, control, mutuality of obligation and others. For example, the ability to substitute another worker to replace you is often argued as being valuable to your IR35 defence.

However, without actually using a substitute, it is hard to prove it is real and unlikely to be an effective defence.

To be effective in your review and discussions with your end client, I would advise you to focus on the following issues/questions which relate to the way you work.

The following has been adapted from articles from specialist contractor law firm, Lawspeed.

1. Was your company engaged because the end client needed a specific task and purpose?
2. Is your company responsible for completing that task, rather than just undertaking some temporary work for a period?
3. Does your company have autonomy when undertaking this task, so that you are task-orientated to get it done properly?
4. Is it the intention for your company to do further or different work from the original task, without agreeing to new contract terms?
5. Will your company have to ask a line manager what to do and how to do it?

If you can answer YES to the first three questions and NO to the last two, you have good arguments to talk to your end client to show that you are not controlled like an employee and should be assessed as OUTSIDE IR35.

The correct answers to the above questions will help to show that you and your company are not temporary employees but business to business contractors providing a specific service.

It will be useful to agree to a detailed Statement of Work with the end client, showing the specific tasks that your company is being engaged to perform.

An estimated end date to the work is helpful and a quote for the work to be done. These can of course be extended as is the case with many commercial contracts.

End clients have left this process too late again and will now be rushing in the next two months to find a process so that they can deal with the administration of assessing the IR35 status of many contractors before April 2021. You will need to try to push past these templated processes to make your own personal case.

I hope the above is helpful and wish you good luck.

Best regards,

Victor Korman
Managing Director
Cogent Accountants