IR35 Delayed

We expect you are aware that the Government has deferred the IR35 reforms in the Private Sector until April 2021.

What does this mean for you?

If you are working through a Limited Company you can continue to do so for another year. Remember that, as a Director of your Ltd Company, you will remain responsible for paying your PAYE tax and National Insurance contributions and will be liable to HMRC for any underpayment.

Two other changes will take place in April, these are:

• 1^st April: the National Living Wage (NLW) rises to £8.72/hour
• 6^th April: the Agency Worker Legislation is being tightened up so that, without exception, ALL PAYE workers will be entitled to Parity Pay after 12 weeks working for a client without a 6-week break. Previously Parity Pay has not been rigorously enforced due to the common use of “Swedish Derogation” contracts but these will no longer be valid from 6^th April.

We will therefore have 3 modes of engaging you with our clients:

• Limited Company Contractor: where you and we benefit from lower tax & NIC payments, so the cost to our clients is reduced accordingly
• PAYE Pre-Parity: where you have not yet worked the 12 weeks to qualify for Parity Pay rates and will therefore be paid the market pay rate
• PAYE Parity: where you have worked the 12 weeks and qualify for Parity Pay rates. In this case you will be paid either the Parity Pay rate or the market pay rate, whichever is the higher.

The Limited Company model is generally only viable for LGV drivers, i.e. 7.5t to LGV1 drivers.

All other workers, these being van drivers, driver’s mates and loaders, will generally be on standard PAYE agency worker contracts.

The issue we will encounter is that often the Parity Pay and Charge rates will be higher than the equivalent Ltd Company rates. Our clients, who are under extreme financial pressure, will insist on us providing Ltd Company contractors or Pre-Parity PAYE workers in preference to more expensive Parity Paid workers. We may therefore have difficulty persuading our clients to accept more expensive Parity PAYE workers.

If you wish to start up your own Ltd Company, we recommend you do this through an FCSA accredited company so that you can be sure that you remain compliant. This will also mean that you can easily transfer to a PAYE Umbrella scheme in April 2021 when the IR35 reforms come into force.

We are still happy to pay you through an Umbrella Company, though, from 6^th April, we will only work with Umbrella Companies who are FCSA Accredited, click here for the list: https://www.fcsa.org.uk/members/. The only exception to this rule is Shield Contract Services, who are in the process of gaining accreditation, and we have suspended registering new workers through them until they have achieved accreditation.

If you have any questions please do not hesitate to contact your local branch:

Stevenage / T: 01438 722800 / : stevenage@driverrequire.co.uk

Tamworth / T: 01827 370260 / E: tamworth@driverrequire.co.uk

Northampton / T: 01604 648444 / E: Northampton@driverrequire.co.uk

St Albans / T: 01727 614140 / E: stalbans@driverrequire.co.uk

Andover / T: 01264 883168 / E: andover@driverrequire.co.uk

Braintree / T: 01376 525725 / E: braintree@driverrequire.co.uk

Dartford / T: 01322 466541 / E: dartford@driverrequire.co.uk