Need More Info? Here’s Our Full IR35 Press Release
What is IR35?
A piece of UK tax legislation designed to tackle “disguised employment”, i.e.: a freelancer undertaking work yet operating as an employee.
How does IR35 impact self-employed or freelance workers?
From April 2020 only workers deemed to be working “outside IR35” are considered self-employed and can benefit from more flexible payment methods. Whether the worker is self-employed or operates under a limited company does not affect whether the contract is “inside” or “outside” IR35.
How does a chef qualify as self-employed?
Are you or the chef you have contracted under any supervision, direction or control? If the answer is yes, then the worker and the contract cannot operate outside IR35 and must be subject to PAYE and employer & employee NI contributions.
A few questions to ask yourself:
- Does the chef choose when they turn up and finish work?
- Can the chef substitute himself or herself for another worker at any point?
- Does the chef have total autonomy over the dishes they cook and ingredients they use?
- Can the chef leave work without permission?
- Does the client have any control over the way in which the chef operates?
From April 2020, the responsibility for assessing whether a contract is able to operate outside IR35 moves from the worker to the hirer.
To be clear, from April 2020 the fee-payer carries the liability and must be deemed to be showing “reasonable care”. It is advised this reasonable care takes the form of a “status determination statement” citing reasons for the decision.
What are the consequences of incorrectly operating outside IR35?
- The hirer will be liable to pay backdated employment costs and possible fines
- The hirer can also be penalised up to 100% of the amount owed
How will Lime be tackling IR35?
It is our opinion that very few, if any chefs can genuinely class themselves as self-employed, certainly when working via an agency. In reality:
- We expect them to work agreed hours that are dictated by the hirer
- Our chefs cannot substitute themselves for a replacement
- When working, our chefs operate under supervision, direction and control. Even when working in an Executive Chef capacity, they still have a reporting line
Based on these factors (amongst others), we will not be operating ANY contracts outside IR35. We appreciate this is a very grey area but are taking a strict stance to ensure we are operating within the values of the business. We work hard to provide clients with a transparent service and whilst offering chefs on a freelance basis can allow us to gain a competitive edge in terms of reduced costs and therefore reduced charges, we are opening ourselves and our clients up to hidden fees, investigations and financial penalties.
We hope our clients understand and respect our position and can continue to work with us safe in the knowledge you have a responsible partner who is protecting your best interests.
Chefs, when it comes to IR35, why choose Lime?
- You can focus on what you do best!
- Lime will take care of your PAYE and NI contributions, emailing you a payslip once a week
- Accrue holiday pay in line with a permanent employee
- Lime will contribute towards your pension
- No accountancy charges, no late-night tax returns
- Work with peace of mind: you, your agency and our clients are operating in a manner, which means there will be no investigations, no hidden costs, no fines
- Dom, Dave, Duncan and the team have got your back
Clients, when it comes to IR35, why choose Lime?
- All chefs we supply will operate via PAYE – no ifs, no buts, no maybes
- Whilst other agencies may be able to save a few pence an hour by operating in muddy waters, utilising umbrella schemes etc, with this comes the risk of:
- Investigation
- Paying associated PAYE & NI contributions
- Significant fines
- We offer complete transparency: what we charge, what we pay, what our employment costs are and the margin we make. No hidden surprises
For more information or to make sure that you, your business or your team are IR35 compliant, please give us a call.
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