Over the August bank holiday weekend around 1500 contractors who were engaged by well-known pharmaceutical company GlaxoSmithKline (GSK) during the 2018/19 tax year received letters from HMRC asking them to confirm their off-payroll (IR35) status.
In the identical letters, HMRC stated that they believe each contractor working through their own Personal Service Company (PSC) in a contract with GSK comes under the off-payroll working rules.
Contractors are being asked within the letter to either demonstrate that they were indeed working outside of IR35 or to reclassify the status of their contract as being inside IR35.
Any recipients who reclassify their engagement with GSK as being inside IR35 will need to provide a deemed payment to HMRC by the 22nd of the next tax month. The amount of this deemed payment will be defined by calculating how much is needed to be repaid in Pay As You Earn (PAYE) tax and National Insurance Contributions (NIC).
What should I do if I’ve received a letter?
Whilst the letter has unfortunately not given recipients long to respond, with HMRC requesting a confirmation of off-payroll status by the 19th September, there is no need to panic if you have had one of these through your letterbox.
By seeking advice from an IR35 expert such as ClearSky Contractor Accounting, our team can assess the IR35 status of the engagement between your PSC and GSK to help put your mind at ease.
To get in touch with us please speak to your accountant or visit our contact us page.