Introducing emTax's IR35 solution


IR35 reforms are definitely going ahead in April 2020. Engagers now have to assess the employment status of their off-payroll workers and issue Status Determination Statements (SDSs) to them and the agency that pays them. If found to be caught “inside IR35” the off-payroll worker will require to have PAYE & NIC deducted from their presented invoices. If it transpires that the SDS was made without taking reasonable care, HMRC can penalise the engager. To mitigate against this risk some larger employers have taken the drastic step of insisting that all of their contractors go onto PAYE. As well as being very expensive, this is the incorrect methodology to IR35 reforms.


To assist engagers HMRC have recently updated their Check of Employment Status Tool (CEST) and some engagers will be happy to use CEST to arrive at their SDSs.

Unfortunately, HMRC’s CEST still omits key employment status factors such as Mutuality of Obligations which has proven to be crucial in many recent tax cases. In November 2019 First Tier Tribunal ruling (RALC Consulting Limited vs HMRC), HMRC stated that the “outside IR35” CEST ruling that the contractor had obtained was irrelevant.


Fortunately, emTax has access to an automated IR35 software solution designed to meet the requirements of all medium and large employers. By harnessing the power of Artificial Intelligence, this tool contains advanced algorithms that automatically weigh up every employment status factor to arrive at a reliable employment status ruling.


To maximise your chances of obtaining an “outside IR35” ruling either from CEST or by utilising our IR35 Assessment Tool you need to firstly get your contracts for services reviewed by our consultants. We can bolster your contracts by adding & updating crucial new clauses that will reinforce the self- employed nature of the engagement. Coupled with this, our consultants can review your current working practices and offer advice on what changes you should consider making to facilitate the maximum number of "outside IR35" rulings possible for your business.


All of the above solutions have been specifically designed to fully meet the requirements of businesses by experienced employment tax consultants.


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