IR35 IT Contractors And Office Holders

IR35 is yet again ‘hot topic’ throughout the contracting community, the recently changed rules and regulations perhaps having a greater effect on limited company professionals than was previously thought. The new IR35 rule ‘could catch many contractors’ is what has been said, and contractors were quick to discuss, debate and ponder this statement online.

As a result of information given recently to the UK government on behalf of a staffing body, concerning the previous year’s legislative alteration to the IR35 rules, this ‘change’ led to much concern that not much had actually changed. This is now being questioned as it is being said that the change to the IR35 rule could ‘catch many contractors’.

Following the announcement concerning ‘office holders’ and contractor tax, those involved within the profession have been seeking further guidance as to who exactly would be affected by the change from HMRC. The Association of Recruitment Consultancies said the state’s announcement that ‘office holders’ were to be brought under IR35 was in reality ‘very broad’ and further clarification was required.

This change in the IR35 rules was a leap for HMRC, as the regulatory position of the tax law has remained fixed for over a decade with few alterations being made since its implementation back in 1999. IR35 is obviously a very important issue to contractors, and for many, this change will be met with both approval and apprehension.

Many have highlighted a potential issue with what the term ‘office’ actually means. This obviously affects the definition of an ‘office holder’ and many have asked for it to be literally ‘spelt out’ so as to avoid confusion. This statement was issued, in an attempt to gain answers to the many queries regarding the change. “IR35 has commercial implications because remaining outside of it makes assignments more attractive to candidates and helps to keep down the costs to hirers. The solution is to amend the legislation to make sure that ‘office’ is clearly defined… [Or] it would be helpful if [officials] could clarify the aims behind the proposal and its meaning.”

Whenever anything major (or minor for that matter) occurs throughout the contracting community, much questioning and anxiety undoubtedly follows, and concerning the recent changes and the definition of an ‘office holder’, this is no different. Some legal representative bodies state that existing case law restricts the definition of what an ‘office’ is, and as a result limits the amount of contractors that will actually be affected.

Whatever the outcome of whether an ‘office holder’ is strictly defined or not, IR35 changes affect contractors regardless of their position, and those in the limited company profession should be very aware of upcoming and existing alterations. IR35 experts provide advice, news and guides to contractors and freelancers on a daily basis so their services are extremely valuable to those affected. There are companies who operate in the field of current affairs regarding IR35 and provide protection and in some cases insurance to protect contractors and freelancers from the potential pitfalls that the legislation can incur.