Ir35 exemption if company < 200 staff

[Lucky Phil]

Hi All,

My colleague claims that if a company has less than 200 members of staff then contractors are automatically outside of IR35 while working for this company. I have never heard of this rule before. Can anyone shed some light on this please?

Thanks
Phil

[jamesbrown]

No.

Your "colleague" is confused with the small companies exemption for when the contractor's PSC decides IR35 status, rather than the supply chain above it. There are no "exceptions" for IR35 itself.

[northernladuk]

The lack of thought and effort people put in to IR35 is frightening.

[JHamp82]

I don't think that's correct. If end client qualifies as a small company then IR35 status determination falls on the contractor not on the end client.

[LondonManc]

I don't think that's correct. If end client qualifies as a small company then IR35 status determination falls on the contractor not on the end client.

Correct. Contractor must still prove the contract is outside IR35 if investigated though. Arguably far easier to gather evidence and explain IR35 to your hiring manager in a small company though.

[northernladuk]

Correct. Contractor must still prove the contract is outside IR35 if investigated though. Arguably far easier to gather evidence and explain IR35 to your hiring manager in a small company though.

I'd agree to some extent but the smaller it is, particularly startups it's very difficult to come in do a single task without interference from the client and go so can be IR35 nightmares. They often need all hands to the pump with a can do attitude to cover anything that crops up. Cover for other staff if they are off, swap to new tasks that become priority etc. Even if you can get the ear of the right person to explain it there is a good chance it doesn't fit what they want. There is the D&C issues and it's very unlikely a small company will understand or accept D&C.

Bit of a double edged sword sometimes.

[LondonManc]

I'd agree to some extent but the smaller it is, particularly startups it's very difficult to come in do a single task without interference from the client and go so can be IR35 nightmares. They often need all hands to the pump with a can do attitude to cover anything that crops up. Cover for other staff if they are off, swap to new tasks that become priority etc. Even if you can get the ear of the right person to explain it there is a good chance it doesn't fit what they want. There is the D&C issues and it's very unlikely a small company will understand or accept D&C.

Bit of a double edged sword sometimes.

Largely depends what you're brought in for I suppose and what your broader skills are.

[northernladuk]

Largely depends what you're brought in for I suppose and what your broader skills are.

Absolutely.