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Accurate IR35 decisions are as vital to the HS2 rail network project as expert contractors are, according to one contractor tax specialist.
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There has been a surge in contractors switching to umbrella companies in the months leading up to new employment status checks implemented by public sector bodies.
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Some agencies believe that the new public sector IR35 rules will be extended to cover contractors working in the private sector within two years.
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Caution has been urged regarding the outcome of recent NHS U-turn about placing its entire locum and contractor workforce ‘inside IR35’.
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In 1999, a group of freelancers banded together to oppose the measure in the Budget which would tax them as if they were 'disguised employees'.
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The NHS has decided to revise its decision to place all contractors and locum staff inside IR35. This follows concerns that public sector organisations were interpreting the controversial new IR35 proposals in an over-cautious 'catch-all' manner.
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The vast majority of contractors do not trust HMRC's online tool to determine the IR35 status of public sector contracts.
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Widespread dissatisfaction with the Government’s approach to employment rules could give ministers no choice but to remodel their controversial legislation once the Taylor Review reports.
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Contractors are being advised to check their IR35 status in order to resolve the confusion and uncertainty over the newly implemented public sector rule changes.
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As the new IR35 legislation comes into effect in the public sector, research has shown that some locum doctors who work as husband and wife teams will need a 50 per cent pay increase to earn the same after the new taxes have been applied.
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