IR35 & the small companies exemption

This webinar, "IR35 & Small Companies Exemption," presented by IR35 Shield CEO Dave Chaplin, provides vital clarity on how the Off-Payroll Working (OPW) rules, commonly known as IR35, apply to small businesses. The session thoroughly explains the "small companies exemption," which dictates that if the client receiving the contractor's services qualifies as "small" under specific Companies Act criteria, the responsibility for determining IR35 status and deducting tax remains with the contractor's Personal Service Company (PSC), not the client.

Dave Chaplin meticulously outlines the differences between the original IR35 legislation (Chapter 8 ITEPA) and the OPW rules (Chapter 10 ITEPA), emphasising that both co-exist. He clarifies how the small companies exemption shifts the tax risk back to the contractor, a crucial point for both contractors and the small businesses engaging them. The webinar also addresses the complexities that arise when a small company client engages through an agency, explaining how the exemption's application depends on the specific contractual chain.

A significant portion of the session focuses on identifying the "client" correctly and the common pitfalls that can lead to unexpected tax liabilities, such as agencies misrepresenting themselves as consultancies. Dave Chaplin stresses the importance of robust due diligence, accurate legal understanding, and well-drafted contracts to avoid these traps. This webinar is essential for small businesses, contractors, and intermediaries to confidently navigate the intricacies of IR35, ensure compliance, and mitigate potential financial risks under the small companies exemption.

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