There have been many legislation changes recently, including IR35, affecting contractors, freelancers and the self-employed. However, contracting is still a very popular career choice for millions of professionals in the UK.
This page has been created to provide an overview of contracting in 2021. As well as summarising the recent changes to IR35 (off-payroll legislation), we also discuss the best ways for contractors to be paid. Whether you’re inside or outside IR35 – contracting has its benefits, and Churchill Knight can support you throughout your journey. Keep reading to find out more.
To find out more about Churchill Knight and our contractor accountancy and umbrella services, please call 01707 871622 or complete the short form below.
Plenty of changes have impacted freelancers, contractors and agency workers over the last five years. However, self-employment is still a prevalent choice for professionals, and there are still plenty of benefits to being a freelancer or contractor in the UK.
One of the main pieces of legislation that affects UK contractors is IR35. IR35 isn’t new – it came into effect in 2000. However, recent amendments to IR35 (often referred to as off-payroll working rules) have significantly impacted the UK’s temporary workforce.
To put it simply, IR35 was introduced by the government to stop so-called “disguised employees” from taking advantage of tax breaks that were not intended for them. Essentially, if a contractor is outside IR35, they’re “self-employed” by definition. They can operate as the director of a personal service company (PSC) and pay themselves tax-efficiently with a combination of salary and dividends. However, if a contractor is inside IR35, they are considered to be working in the same way as permanent staff. Consequently, they must be taxed at source and essentially will receive a net salary just like a worker in a full-time position (PAYE).
Before April 2017, limited company contractors could determine their own IR35 status and pay themselves accordingly. However, the government changed this in the public sector; from April 2017, this responsibly was passed to the end-hirer – the contractor’s client. The government implemented similar off-payroll changes in the private sector in April 2021, and from this date, a majority of contractors could no longer decide their IR35 status.
Limited company contracting is the best way for contractors to maximise their pay retention – providing they’re outside IR35.
The changes to off-payroll legislation have certainly impacted limited company contractors. However, there are still plenty of assignments out there advertised as “outside IR35”. And as the marketplace slowly adapts to the new off-payroll working rules, more and more organisations will seek highly-skilled contractors for niche assignments – which will be assessed as outside IR35.
Churchill Knight & Associates Ltd has over 20 years of experience providing specialist contractor accountancy to the UK’s temporary workforce. Over the last 20 years, we’ve helped over 25,000 limited company directors with running their business, and we look forward to working with many more.
Our limited company accountancy packages have been intricately designed to provide contractors precisely what they need to succeed as a limited company director. They’re also priced very competitively. Not only can our professional accountants help you legally maximise your pay retention, but our service also includes a large number of extras. These include access to innovative software, bookkeeping, a dedicated Account Manager, full administrative support, no setup fees, and more. And should you find yourself working on a short-term assignment that’s inside IR35 – we have you covered. Churchill Knight 360 is our exclusive service available to all limited company contractors, and it allows you to use our umbrella company payroll as little or frequently as you please for absolutely no additional cost. This means you can keep your limited company running when you’re inside IR35 – ready to use again for the next outside IR35 assignment.
Churchill Knight is committed to compliance and we’re proudly accredited by the FCSA (Freelancer & Contractor Services Association). The FCSA is the UK’s leading professional body dedicated to ensuring the supply chain of temporary workers is compliant.
To find out more about Churchill Knight & Associates Ltd and how we can help you and your business flourish, please call 01707 871622, or complete the short form on this page.
Using a compliant umbrella company is a very efficient and compliant way for contractors and freelancers to be paid for assignments that are inside IR35.
Umbrella companies are a popular choice amongst contractors, freelancers and agency workers who find themselves inside IR35. Opting to use an umbrella company is generally regarded as the easiest way for temporary workers to get paid compliantly. Registering with an umbrella company can be completed in five minutes, and there are no joining fees or tie in period. Once you’ve registered, you become an employee of the umbrella and will be paid for the hours you work for your end-client. There are also plenty of umbrella company benefits, including employee rights, Same Day Faster Payments, free insurance cover, and more.
Umbrella companies process the payment of their employees using HMRC’s tax system – Pay As You Earn (PAYE). This ensures contractors are taxed legally and compliantly with UK tax law. They’re the perfect option for long-term assignments as once you’ve registered, the ongoing administration is minimal. Because there is no tie in period, umbrellas are also perfect for limited company contractors who decide to take a short term “inside IR35” assignment, as they can leave when they want to return to their limited company.
Every week, Churchill Knight Umbrella processes the payroll of thousands of temporary workers in full compliance with HMRC. We’re proudly accredited by the FCSA and believe this is the best way to showcase our dedication to operating compliantly within our sector.
For more information about Churchill Knight Umbrella, or to request a free, tailored umbrella company calculation, please call 01707 871622 or complete the short form on this page.
To find out more about Churchill Knight and our specialist contractor accountancy and umbrella payroll services, please give us a call on 01707 871622 or complete the short form below.
Churchill Knight & Associates Ltd and Churchill Knight Umbrella are proudly accredited by the Freelancer and Contractor Services Association (FCSA). The FCSA is the UK’s leading professional body dedicated to ensuring the supply chain of temporary workers is compliant with HMRC’s rules and regulations. We believe that being an accredited member of the FCSA is the best way to showcase our commitment to compliance within our sector.
Whether you’re using one of our limited company accountancy packages (Churchill Knight & Associates Ltd) or you’re an umbrella company employee (Churchill Knight Umbrella), you can rest assured knowing that you are in the very safest hands.
