Contractors. It could be a financial risk if your contract is now classed as inside IR35.
Let's say that you have been at a company as a contractor for the past nine months. Your original contract was for three months. Then you got renewed for six months. For these two contracts, you had assessed yourself as being outside of IR35.
In April 2020, instead of you determining your status, the end client now must determine your status.
The client offers you another six-month renewal but says that it needs to be inside IR35. You reluctantly accept this as there is a shortage of contracts and you have a mortgage to pay.
You could have just landed yourself in BIG trouble.
Along come HMRC. They agree that your latest contract is inside IR35, no problem.
Then the bomb drops. The HMRC says, what's the difference between this and your initial two contracts?
Gulp, you are trapped, and your previous two contracts could be re-classed as being within IR35. You could end up having to pay taxes that HMRC demand.
Instead of accepting the contract within IR35, you are probably better off finding a new contract with a new client. At the same time, educate your existing client about how damaging the IR35 rules are and get them to campaign for a change.
Please remember, I have no legal standing. Ultimately everything rests with you, so make sure you consult with an IR35 Insurance provider.
If you are interested in finding contracts that can be outside of IR35 please register here.