The recent changes to IR35 legislation have affected different people in different ways. If you’re now ‘inside’ IR35, you may be weighing up your working options.
To help you, we’ve put together this detailed explanation of all the different ways you can continue to work compliantly so you can make the best decision for you. If you’d like to talk it through, don’t hesitate to get in touch with our expert advisers on 01244 684700 – we’ll be happy to walk you through your options and give you a free contractor assessment to help you decide and get set up in your preferred working option.
Continuing to work through your Limited Company
If you’re already a limited company director, then on the rare occasion you can continue to work through your PSC even though you’re ‘inside’ IR35. This is only beneficial to you in certain circumstances. For instance, if you are working on more than one contract at once (some ‘inside’ and some ‘outside’ IR35) or you’re working a very short-term role, you may choose to put all payments through your PSC, no matter their IR35 status to enable you to manage your income in one place.
How your pay is processed
If you choose to work in this way, your fee payer (typically your agency, though this can occasionally be your end client) will need to pay your company through their payroll. They will be required to deduct Income Tax, Employees’ National Insurance, Employers’ National Insurance, and the Apprenticeship Levy, before paying you a net salary. Once you receive payment from the fee payer, this can be paid from your company to yourself and you will not be required to make any further deductions to this amount as it has already been taxed. You can also continue to pay yourself dividends that have been earned from contracts which fell outside of IR35. However, we would generally recommend not to process separate salary payments from your PSC.
While this method allows you to control your finances in one place, for most people, other ‘inside’ IR35 working options are more advantageous, providing additional benefits and enhanced flexibility.
For the majority of ‘inside’ contractors, Umbrella employment is the most suitable option because you’ll receive the same take-home pay as if you were working ‘inside’ through your PSC, but you have access to a much wider range of employment benefits and less admin to deal with.
How your pay is processed
Each pay period, you’ll be required to complete a timesheet which will be signed by your end client and sent on to your agency. Your agency will enter your working hours into the Crest Plus portal, and we’ll raise an invoice for the hours you’ve worked. The agency will then send this invoice to the end client (the company that engaged your services). Your payment will travel back down the supply chain: from your end client to the agency, and then to us. We’ll deduct our Umbrella margin and any necessary tax deductions including Employers’ National Insurance, the Apprenticeship Levy, Employers’ pension contribution (if you’re opted in), and any holiday pay you have accrued. Then, you’ll receive your payslip along with your net pay.
Although it may sound complicated, it’s really quite simple – you submit your timesheet, we do the leg work, then you get paid!
There are plenty of great reasons to work with Crest Plus Umbrella, including:
- Free consultation to discuss whether Umbrella is the right choice for you
- Receive all employment benefits including holiday pay, sick pay, maternity/paternity leave
- Continue to pay into your private pension at no extra cost – or take advantage of our employers’ pension contribution pension scheme
- FCSA-accredited for guaranteed compliance
- Personal accident insurance included as standard: we cover your commute too!
- Employers’ Liability Insurance up to £10m, Public Liability up to £10m, and Professional Indemnity up to £5m
- Easy to switch between assignments while building a record of continuous employment
- Sample take-home pay calculation provided upon enquiry so you know exactly what to expect
- Save £££ with our exclusive rewards scheme – Crest Plus Advantage
- Support from our expert team whenever you need it.
Click here to find out more about our Umbrella employment.
CIS (Construction Industry Scheme)
IR35 was introduced in 2000 to prevent disguised employment through intermediaries, such as PSCs. This means that IR35 does not impact anyone trading as a self-employed CIS worker as there is no single person intermediary between the worker and the hirer. It’s a great option for anyone self-employed in the construction industry!
How your pay is processed
Once you’re registered with Crest Plus for CIS, we will invoice your recruitment agency or end client for the hours you’ve worked. We will then calculate and deduct the tax you have to pay (at the CIS rate of 20%) as well as our margin, then pass the net payment on to you. You will have access to your payment records through our online portal, so you can find your information easily 24/7. You’ll need to complete a Self-Assessment Tax Return each year, but we can do this for you if you wish.
Working with Crest Plus via the Construction Industry Scheme is favourable for many contractors, involving less risk and financial liability around compliance with IR35 while providing a range of benefits including:
- Free contractor assessment to ensure CIS is a suitable solution for you
- Market-leading personal accident insurance included as standard – we cover your commute too
- 100% compliance guarantees – we understand CIS compliance so you don’t have to
- Support with submitting your Self-Assessment Tax Return accurately and on time – helping you claim expenses easily
- Prompt and accurate payments. Our straightforward payments process means no delays
- Switch between projects in a matter of minutes
- Detailed pay illustrations provided from the outset so you know exactly what to expect
- Save £££ with our exclusive rewards programme – Crest Plus Advantage
- Support from our experienced team whenever you need it.
With more than 20 years’ experience supporting construction contractors, our experts are on hand to help you decide if this is the best option for you. We’ll be here whenever you need us to provide support with submitting your Self-Assessment Tax Return and other related paperwork, so you can focus on what you do best.
Click here to find out more about Crest Plus CIS.