Tax rules IR35 – what you need to know if you employ contractors

Adrian Marlowe, managing director of employment law specialists Lawspeed, discusses new tax rules IR35 and what they mean if you use contactors…

For many years the options available to businesses for hiring in staff have included the use of contractors, and the number of people willing to work as contractors has grown exponentially over the last decade. Engaging talent therefore has been a relatively straightforward exercise given the few obstacles that have existed when hiring in contractors; all that is needed is to identify the person with the right skillset and availability, agree a rate, make sure the person has a company (PSC), enter into a contract for the work requirement with that company and pay gross on invoice delivered. No tax risk, no employment rights. And the contractor gets higher net receipts. This method has been particularly suitable for businesses that have a policy to hire temporarily and have no need to hire employees.