IR35 refers to the UK anti-avoidance tax legislation designed to target tax contractors that are employees in all but name (disguised employment) at a rate similar to employment. From 6 April 2021 onwards, companies will have increasing pressure to be compliant with rule IR35 that will be extended to medium and large companies in the private sector as well as charities.
If contractors are operating through an intermediary such as a limited company, they need to be properly employed as an employee by status, with additional payments.
To determine whether or not an employee falls under the IR35 regulation, HMRC has established a set of rules that allow lawyers or regulators within companies to determine whether or not a particular employee is qualified as an independent contractor. The criteria can either be assessed by an expert or through a partly automated reasoning process built in BRYTER. An increasing number of experts are using partly or fully automated reasoning workflows to undertake the assessment in a digitized manner. This not only enables companies to undertake an impact assessment at scale but also saves time and resources while mitigating the risk of non-compliance with the new rules.
BRYTER is supporting a number of applications to assist professionals in dealing with all aspects of the IR35 legislation, including:
- freelance checker applications for private practices to accelerate assessments and deliver ready-built customizable applications to their clients;
- freelance checker applications for corporate departments to integrate IR35 checks in departmental workflows; and
- self-service checkers and document generation to expedite the production of determinations.