Your IndustryDec 1 2015

IR35 workers may land in AE net

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HMRC may be set to crack down on personal service companies, meaning more people could become eligible for auto-enrolment as part of the changes.

According to Laith Khalaf, pensions specialist for Bristol-based Hargreaves Lansdown, the taxman could start cracking down on employment arrangements such as IR35 Personal Service companies.

IR35 could apply when you work for a client through an intermediary such as a limited company or partnership. However, a possible HMRC clampdown on these employment arrangements, said to be used by as many as 100,000 people, could have a knock-on impact on individuals’ take-home pay, and on businesses’ tax and NI costs, as well as workplace pensions.

Mr Khalaf said: “Anyone who has to be redefined as an employee rather than an external contractor could become eligible for auto-enrolment into the employer’s workplace pension scheme.”

This comes as the film industry has started to make arrangements to auto-enrol its contracting staff. In an insight paper, published by business services firm Sargent Disc, which specialises in the film and media industry, the firm warned that “auto-enrolment can be daunting, especially for the media and production industries”.

Approximately one-third of the workforce in television and nearly half in film are working on Schedule D freelance contracts, sometimes employed through third-party agencies and often on short-term and periodic contracts.

Adviser view

Steve Wood, head of AE at London-based Helm Godfrey, said: “Nobody wants to see money that could otherwise have been spent on making the next British blockbuster being used to pay needless fines for missing an auto-enrolment staging date, so firms must act now to ensure they avoid a pension apocalypse.”