Gtech Consultancy has partnered with IR35 specialists Qdos to bolster our work to follow the off-payroll working rules.

It adds an extra layer of reassurance for our independent IFS ERP consultants that all our contracts are outside IR35 and don’t risk falling foul of HMRC. Plus, the partnership gives our contractors access to expert advice and support on business insurance and self-employment tax.

Oscar Spence, Gtech Consultancy’s IFS Business Consulting Manager, explains:

• What IR35 is
• Why Gtech has partnered with Qdos
• The benefits of the partnership and how it will work
• The potential penalties for getting IR35 wrong

What is IR35?

IR35 is the name given to the off-payroll working rules that ensure a worker (sometimes known as a contractor) pays broadly the same income tax and National Insurance as an employee would. The rules apply if the worker who provides services to a client through their own intermediary would have been an employee if they were providing their services directly to that client.

HMRC is cracking down on IR35 non-compliance to make sure people have the correct employment status and pay the right amount of tax.

For example, if you’re in a contract for 12 months, and then that contract is renewed for another 12 months, followed by a further 12 months, you’re at the company for three years on a contracted day rate. So, if your contract doesn’t include specific terms about your work, then HMRC might turn around and ask, “Why have you been working at a company for three years? It looks like you should be employed on a salary.”

Essentially, a contract should say you’re contracted for a specific period to work for a particular company on specific things with certain deliverables (i.e. what you’re expected to achieve in that time).

Whereas, if a contract isn’t specific, it could raise a few questions with HMRC.

That’s why we always make sure our contracts include all the required details to be compliant with the legislation.

What’s the difference between ‘inside IR35’ and ‘outside IR35?’

When referring to IR35, we talk about ‘inside IR35’ and ‘outside IR35’.

To be ‘inside IR35’ means you’re viewed as an employee, for tax purposes, of your end client and therefore subject to PAYE.

Whereas to be ‘outside IR35’ means you’re operating as a genuine business, and therefore operating outside of the IR35 rules. You’re able to pay yourself a salary, draw the remainder of income as dividends, and remain responsible for your taxes as usual.

All our contracts are outside IR35 and we always check they’re watertight, so they conform to the rules.

Why has Gtech Consultancy partnered with Qdos?

Qdos specialises in business insurance and self-employment tax. They’re the go-to IR35 specialists.

The company started in 1988 as a small tax consultancy, and grew from there. After the IR35 legislation was introduced in 2000, they noticed there was a massive gap in the market because no-one was really focusing specifically on IR35. Qdos provides services for contractors and the self-employed, as well as for recruiters and agencies.

What are the benefits of the partnership?

At Gtech, we’re all about supporting our network of independent IFS ERP consultants. So, partnering with Qdos gives added peace of mind for our contractors, our end clients, and our own business. It gives the extra reassurance that our contracts are fully compliant with the rules, and that if there are any issues, we’ve got a team of experts on hand to help.

The partnership is especially useful if you’re starting out as an independent consultant because you might not be aware of what you must declare and what your contract should say. The last thing you want is HMRC knocking on your door saying you owe tax, National Insurance, interest and potentially a penalty, because you’ve got your employment status wrong.

The partnership offers access to support, advice and compliance with the rules. Qdos’s services include IR35 assessments and dispute management, which means they can act on your behalf if you have an issue.

In fact, the partnership offers benefits for everyone involved:

• If you’re a contractor, it removes the anxiety of getting tripped up by the off-payroll working rules.
• For us, we know we’re doing the right thing for our contractors, our clients, and our own business.
• For our end clients, they’ll be confident they’re working with trusted professionals.

How will the partnership work?

If you’re a contractor, you can come to us and we can refer you to Qdos. They can set you up with things like tax liability cover, IR35 contract assessments, professional indemnity insurance, etc. It’s all about getting support as you start out as a sole trader or limited company.

It can be daunting when you go freelance, so it’s good to know there’s advice and support available to make sure you’re doing everything by the book.

Before this partnership, if you had an issue with your project contract, you would perhaps have needed to find a solicitor, tax adviser or accountant yourself. You might not have known how to find the right professional and the process might have taken some time, which could have added to any stress you might have been experiencing.

Whereas now, if you’ve got any queries or issues about a contract, we simply put you in touch with Qdos, who will answer your questions. Plus, they’ve got an online management portal that gives you updates on the progress of any assessment.

And as an engager, we can ask Qdos to check and assess the contracts we draw up.

So, if you do IFS contracting through us, you’ll know you’re in safe hands, because we can offer you a position, write up the contract, and give you access to IR35 support should you need it.

Do contractors worry about falling foul of the off-payroll working rules?

If you’re thinking about independent IFS consulting, you might be nervous about leaving your permanent job with its salary, benefits, holiday, and so on. However, if you’ve got the right level of IFS expertise and the skills to work for yourself, then self-employment could be hugely beneficial for you, both financially and because of the freedom it offers.

And if you want to know more about the practical issues of freelancing, simply get in touch with any of the Gtech team who would love to show you it’s not as scary as you might think. In fact, contracting can bring many benefits, such as attractive rates of pay and being able to choose who you work for, when and where.

Who’s responsible for IR35 compliance and what are the potential penalties?

The responsibility depends on when, and with who, you’re contracting.

Changes to the legislation mean the responsibility for IR35 compliance lies with:

• The contractor, if you’re providing services to a ‘small company’ in the private sector.
• The end client/fee-payer, if you’re providing services to a client in the public sector, or to a ‘medium or large company’ in the private sector.

Penalties for non-compliance could be bills for the tax and National Insurance owed, as well as interest and fines.

Looking after our IFS consultants – and our clients

Our partnership with Qdos is a natural step forward in our drive to do the best for our contractors and the businesses we support as they navigate their IFS implementations.