Turning IR35 on its head: 5 key takeaways

With IR35 causing no end of problems for accountants and contractors alike, Accountancy Age, in association with Receipt Bank produced the webinar entitled Turning IR35 on its head. We spoke to Jessica Pillow, founder of Pillow May Ltd and Jason Piper, head of tax and business law for ACCA about the coming changes – and what accountants can do to prepare.

The principle behind the IR35 changes is good

Piper argued that the self-assessment test that contractors have been expected to understand and complete is too complicated and so, in principle, it is a good thing that the burden moves from the contractor to the end-user (the company).

“Unfortunately, it’s a very complicated test to apply. You have to work out what the hypothetical contract might have been between the contractor and the end user in the absence of intermediaries which exist. So, that’s quite a complicated test to try and carry out, in a very complicated area of law,” he said.

Pillow added that while she agreed with Piper, she didn’t expect the larger companies to take such a cautious approach.

“For me it is the right way around: the end-user should make the decision because they are the one in the end that puts the contract in place. They’re generally the bigger party they generally have more skills in-house so I do think it’s the right way round, but what concerns me I s how risk averse they’re being which I didn’t appreciate with really large companies were going to be quite so risk averse in that they don’t want to take any risk at all.

“But fundamentally I don’t think it’s the wrong thing because the tax risk that we’ve been expecting contractors to bear over the last few years has been unacceptable,” she said.

To discover the five key takeaways from the webinar simply fill in the form below…

Alternatively, download the full, free webinar for more information on IR35 here.