Hudson Freelance is a new service for construction companies that rely on off-payroll consultants: for example, Project Managers, Civil Engineers, Quantity Surveyors, Structural Engineers, CAD Technicians, Estimators/Planners, Contracts Managers, HSE Advisors, Logistics Managers, and Commercial Managers.
“We’ve set it up because these firms will soon be hit by changes to IR35 regulations,” Managing Director Ian Anfield explains. “From April next year, HMRC is going to crack down – hard – on firms that rely on white collar freelance consultants who work through their own limited companies.”
- End-user firms will be liable for the tax and NICs of consultants who work through their own limited companies, rather than the individuals themselves.
- HMRC predicts 90% of firms that use freelance contractors will FAIL the IR35 employment status changes.
With highly paid consultants often in the 40% tax bracket, the potential cost of non-compliance is likely to be much higher than for CIS status errors:
- Unpaid income tax
- Unpaid employers and employees NICs
- Interest on unpaid tax and NICs
- Penalties for non-compliance
- Under-deducted auto-enrolment employers and employees pension contributions
- Unpaid apprenticeship levy
“It’s far simpler – and more lucrative – for HMRC to go after a firm with five consultants, rather than chase five individuals who can simply fold their limited companies to avoid paying what they owe. But construction companies can’t afford to swallow a potential 40% increase in costs, simply to remain compliant, or pay massive fines if HMRC decides an off-payroll consultant is an employee.”
Hudson Freelance eliminates all risk
Clients can use Hudson Freelance alongside our CIS and PAYE services.
It is an IR35-compliant service that has been operational and road tested for over two years. It passed its first major test at an employment tribunal last month and removes any risk of you or your consultants falling foul of the new regime.
And as you would expect this is something we GUARANTEE. If HMRC or an employment tribunal successfully challenges the status of any consultant engaged by Hudson Freelance, we will provide and pay for the legal team to argue the case. If we lose, we pay the fines or awards, not you.
The importance of preparing well in advance
Ian Anfield adds: “As always, we are ahead of the curve when it comes to self-employment issues and their HMRC implications. Moreover, we have been invited to give feedback and to attend an HMRC roundtable in London, where the roll-out will be discussed.
“We will provide updates as and when the government reveals further details, and in the meantime, clients who will be affected need to contact us without delay. You need to have the facts at your fingertips, the processes in place to make well-informed decisions, and good ongoing relationships with the contractors you rely upon. So please don’t leave it until the last minute.”
Find out more here
