Freelancers' Questions: Will the recruiter weigh in if I ignore off-payroll rules?

Freelancer’s Question: Are my public sector colleagues correct to say that a freelancer running their own limited company can just carry on and ignore the off-payroll regime? Or will it fall to my agency to tell me the status of my contract, in terms of its exposure to IR35?

Expert’s Answer: Let’s put your initial question another way. You’re effectively asking -- ‘Can I live with knowing that it is the supply chain’s responsibility to report these schemes?’

Well, if you can sleep at night knowing that, then by all means follow your colleagues. But as advisers, we’re having many battling conversations with a range of people to educate them of the risks of the ‘head in the sand’ approach! We’d say that when it affects your way of living, as the regime does, it makes a decision to ignore it very hard. And that way of living is definitely being affected – freelance contractors running their own limited company (also known as Personal Service Company ‘PSC’) are now taking home considerably less income without any top-up in gross pay.

As to whether your agency will convey to you the IR35 status, yes, they will. But remember, this decision should come from the end-client. If for whatever reason you are unhappy with the decision because you feel, contrary to what’s decided, that your day-to-day practices are ‘outside IR35’, I recommend you challenge the decision. At the very least, obtain the client’s rationale for it, as you are permitted to do. Many public sector bodies have become risk-averse and decided on a ‘blanket’ approach -- as opposed to case-by-case basis which the IR35 legislation updated in April 2017 for the public sector actually calls for, due to its ‘reasonable care’ provision. Good luck!

The expert was Dan Moss, a director at accountancy firm Orange Genie.

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