Much to the dismay of many agencies and contractors, Chancellor Rishi Sunak failed to mention anything regarding IR35 in the 2021 Budget announcement on Wednesday 3rd March. Although the new IR35 rules were initially due to come into play in April 2020, they were inevitably delayed due to the COVID-19 pandemic.

We understand that many businesses may have expected a further delay to be announced in the Budget and as such, may be ill-prepared for the new rules on IR35 that will roll out on 6th April 2021.

With less than three weeks to go, we’ve pulled together a last-minute guide to make sure that you’re as prepared as possible for the looming IR35 changes, and the impact they may have on your business.

A quick reminder – what is IR35?

The IR35 laws were first introduced in 2000 in an effort to identify ‘disguised employees’ within businesses. IR35 legislation ensures off-payroll and on-payroll workers are taxed fairly and accordingly. Breaking this down, this means that if a contractor is working under the exact same conditions as a contracted employee, then IR35 rules make sure that the contractor pays the same tax and national insurance contributions as their employed counterpart.

What are the new rules?

The change on 6th April 2021 concerns who will make the IR35 determination. At present, contractors themselves are responsible for determining their employment status, and whether or not they’re working outside IR35 rules. When the new rules come in, this responsibility will shift to the client (i.e., agency).

Agencies will be responsible for determining the employment status of their workers and whether they fall inside or outside of IR35. For example, if you are registered as self-employed, but are found to be working as an employee, the agency will be responsible for paying any additional tax due.

Who will be affected by the changes?

The legislation change applies to all medium, large or private sector businesses and agencies. Contractors, in particular, will be affected, including those who work in construction, IT and engineering, to name a few.

The new IR35 rules don’t, however, apply to all businesses. Currently, small business as well as sole traders and PAYE agency workers, are exempt. There are also situations where it is possible to work outside the scope of IR35, for example, if you are a limited company contractor genuinely working on your own, i.e., using a contractor to provide services, not ‘employed’ by a client.

How Can We Help?

With the deadline fast approaching, please do get in touch if you have any concerns regarding the changes to IR35 and how it may impact your business.

Our team are ready and happy to help you through the ideal options for your business and put a plan in place for your payroll Solutions.

Contact our friendly, knowledgeable staff today to discuss what we can do for you.

Are you ready for IR35?

IR35 reforms are less than a month away now but many businesses have not yet looked into how these reforms will affect them.

At Azure Global, we are here to help with two webinars delivered by our industry experts.

 

On Thursday 18th March, 12.30pm-1.15pm our discussion topic will be:

What are the contractors options if they are inside IR35?

We will discuss employment costs, calculating an Umbrella rate and Umbrella benefits.

On Friday 19th March, 12.30pm-1.15pm our discussion topic will be:

Options for Construction agencies and their clients within IR35. 

We will talk about options for CIS and Limited companies and what the reforms might mean for agencies and also end clients.

 

Our panel have over 30 years combined experience in the payroll industry and have worked for some of the biggest players in the sector. They will share their advice and expertise and will also be available for a Q & A session after.

 

Join the Webinar

If you would like to join our webinars and learn amore about the IR35 reforms, please add the links below to your calendar

Thursday 18th March 

Topic: What are the contractors options if they are inside IR35?

Time: Mar 18, 2021 12:30 PM London

https://us02web.zoom.us/j/81725025338?pwd=K0tNZzRBMG1sYU00K1NyU084VnFwZz09

Meeting ID: 817 2502 5338

Passcode: 146345

 

Friday 19th March

Topic: Options for Construction agencies and their clients within IR35

Time: Mar 19, 2021 12:30 PM London

https://us02web.zoom.us/j/85150101079?pwd=Z0tsUzljcm5vS0Vnb0Z1Sml1ZnU2Zz09

Meeting ID: 851 5010 1079

Passcode: 423106

 

Contact us at hello@azureglobal.com today

 

Each month we profile one of the Azure Global Team. This month we are speaking to our Customer Service Manager, Nicole Adams.

 

 

How long have you worked in the Payroll world?

I have worked in the payroll industry since I left school! For the last two years, I have been leading our Customer Service Team across the UK, primarily dealing with our contractor’s queries.

 

What do you feel your strengths are?

I try to create a good culture in my team so that everyone feels comfortable and happy in their roles. My team are very supportive of each other, despite being spread across the country and I believe this helps us all to do a better job.

 

What do you feel is an important part of your role?

I think the most important part of the role is to provide excellent service to our agencies and contractors in every single interaction they have with Azure Global.

 

What challenges have you faced?

2020 was just one big challenge! The last year has been really challenging, getting to know a new team, and new systems whilst everyone was stuck in their homes across the country. We survived though!

 

What is the best thing about working for Azure Global?

It’s the people, even though we are spread across the country, we still have a strong bond and get on well together. We are looking forward to when we can finally all meet up and celebrate.

 

Tell us more about you, Nicole!

I enjoy keeping fit and can often be found pounding the pavements on my lunch hour or using the office treadmill and kettlebells. I have also recently bought my first home with my partner so I’m always on Pinterest looking for inspiration.

 

The 1st of April 2021 will see a 2.2%% increase to the National Living Wage, lifting it from £8.71 per hour to £8.91 per hour. This increase will benefit around two million of the lowest-paid workers in the UK.

The National Living Wage is also increasing and will be extended to cover anyone aged 23 and over, this was previously 25 and over.

The table below details the changes by age.

Age Range Last YearFrom April 2021
Apprentice Rate£4.15£4.30 (up 3.6%)
Age 16:17£4.55£4.62 (up 1.5%)
Age 18:20£6.45£6.56 (up 1.7%
Age 21:22£8.20£8.36 (up 2%)
Age 23 or over (NMW)£8.72£8.91 (up 2.2%)

 

Pensions

There are no changes to the way pensions are calculated, Employee or Employer contributions at present.

 

Employers NI

There are currently no changes to these rates.

 

Why is this important?

Increases in NLW and NMW are welcome news for low paid workers but there are cost implications for employers who will need to factor in the increased labour costs to their operating costs.

 

If you are unsure about how the changes will impact your business, contact our teams now at hello@azureglobal.com

Protecting jobs and livelihoods was the focus of the 2021 Budget, which Chancellor Rishi Sunak recently revealed. Mr Sunak, speaking in the House of Commons on Wednesday 3rd March 2021, pledged even more support to workers and businesses to keep them afloat over the coming months as the UK begins to emerge from the coronavirus pandemic.

Part of the significant package of financial support was an increase to both the National Living Wage and the National Minimum Wage. As of 1st April this year, there will be a 2.2% increase to the National Living Wage, lifting it from £8.71 per hour to £8.91 per hour.

The National Living Wage previously only covered those aged 25 and over. However, the age threshold to qualify has now been extended to cover anyone aged 23 and over. This means over two million of the lowest-paid workers in the UK will benefit from this increase.

For those under the age of 23, the National Minimum Wage has also been boosted, to £8.36 for those aged 21-22 and £6.56 for 18–20-year-olds.

The rate of pay for apprentices has also increased by 3.6% and the Chancellor has further announced that the incentive payments to businesses for recruiting apprentices will be doubled to £3,000 for all new hires, of any age.

It’s worth noting that there weren’t any changes announced in regard to pensions, for both employer and employee contributions. Additionally, at present, there are no changes to employee national insurance rates.

We’ve outlined the wage increases by age in the table below:

Age RangeLast YearFrom April 2021
Apprentice Rate£4.15£4.30 (up 3.6%)
Age 16-17£4.55£4.62 (up 1.5%)
Age 18-20£6.45£6.56 (up 1.7%
Age 21-22£8.20£8.36 (up 2%)
Age 23 or over£8.72£8.91 (up 2.2%)


How Can We Help?
 

The increase to both the National Minimum Wage and the National Living Wage will undoubtedly be positive news for many low paid workers across the UK, especially when 16–24-year-olds are amongst one of the hardest-hit brackets for redundancies over the last year.

However, there is a concern with regard to the employment cost increase that businesses now face. If you are unsure about how the wage changes will impact your business and need some help with your payroll, here at Azure Global, we can help.

Our team are ready and happy to help you through the ideal options for your business and put a plan in place for your business payroll needs.

Contact  our friendly, knowledgeable staff today to discuss what we can do for you.