How have my fellow freelancers been affected by changes in IR35?
As an American who lives here, I'm still trying to get my head around this subject. But I just read the new report on the impact of the new off-payroll rules from the IPSE (Association of Independent Professionals and the Self-Employed).
The report says over a third of contractors have left self-employment since the rules come in. Have you been affected by them? As for me, I was working out of a shed for so long for the same client that I only just now realized the rules have changed.
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- Thanks for the replies. There's a handy gov.uk tool for determining whether you will count as self-employed or not for tax purposes, at https://www.gov.uk/guidance/check-employment-status-for-tax.Benedict: Interesting about your experience with umbrella companies, which are something I have been looking into. And zero hours contracts are what came to my mind first when I heard about all this, so it was interesting that you also invoked this. Hoping things get less chaotic for you.I'm leaning towards forming a limited company, based on my last few days' research. I'm also hearing from more experienced freelancers that clients are often being over-cautious about IR35 in a lot of situations where it may not apply -- like at small businesses that turn over less than £10 million. In my case, the gov.uk quiz assessed me as self-employed in my last long-term gig because of factors like setting my own hours, not being entitled to any benefits, using my own e-mail address, and having the kind of contract that discusses property rights to my code. I'm not 100% sure this is right but it seems right.
- Hi John,If you were working to a client that long that you realise changes just now than I'm afraid you might fall insde IR35 between I assume you invoiced outside. I would really recommend that you have. a catch up with this client and with your accountant.Otherwise my personal experience that I had to turn down a few gigs because of IR35 but I wouldn't say it caused a big issue. Where one door closes one other opens. You / your client / employer / etc basically have to pay more taxes on gigs that falls inside IR35, yes it goes back to the fact that the government still struggle to understand the idea of shared economics and think it's fair to pay same amount of tax on a some months gig than in long years of employement.So nothing to worry about, but be aware that gigs inside you pay more taxes, it can vary depending how much you earn on an annual base. If it varies by gig by the end of the year you pay by the average but generally a way worse deal, you potentially loose 5-15%.
- I only went self employed about 4 months ago so I don't really know what it would be like without IR35. At the moment I find most of my work through recruiters. Once they find a client for me to work with, they will direct me towards an umbrella company (all the recruiters I use wont pay me directly unless I am a ltd company regardless of the job being inside of IR35 or not) who process invoices for me. I end up walking away being paid a lot less than I could if it wasn't for IR35. I have found a small amount of work outside of IR35 but not much. Using an umbrella company feels more like I'm on a zero hour contract rather than being self employed. I love being self employed for all the freedom and autonomy that it gives me but IR35 is making it a lot harder and taking away some of the autonomy (and money). I can't help but feel that there's a better way of doing things. Would appreciate any insight or advice anyone can give.
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