IR35 FAQ

Answers to frequently asked questions on IR35

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The off-payroll working rules (OPW – also known as IR35) seek to ensure that contractors pay the correct level of tax.
If the contractor is inside IR35 it means that income tax and national insurance contributions must be deducted as if they were an employee. In this scenario, the contractor’s deemed employer is responsible for ensuring appropriate deductions are made.
If the contractor is deemed as Outside IR35, the OPW rules do not apply to them, and they remain liable for ensuring the correct amount of income tax and/or national insurance is paid.

Before April 6th 2021, the responsibility fell with the PSC. Post 6th April, the hiring organisation (client) will be responsible for determining whether the placement falls inside or outside IR35. Additionally, the client may instruct on the placement type.

'Time and materials' refers to a placement where a client will pay the contractor based on the number of hours worked plus any added material expenses.
'Statement of Work' (or SOW) - is a contract based around project milestones/deliverables that defines the entire scope of the work involved for a client which includes things such as quality, costs, and timeline. Completion of these milestones/deliverables is what triggers payment of a contractor, not a timesheet.

If you have a live placement that expires before the 6th April, you do not need to do anything.
If you have a live placement that ends after the 6th April, you do not need to do anything, but you may wish to end that placement early and resubmit it using the new placement categories.
If you do not end the placement, Sonovate will continue to make payments (as instructed by you) in the same way as we currently do, until that placement ends.
Any live placement that was submitted prior to the 6th April cannot be extended after the 6th April – it must be resubmitted using the new placement categories, although it will be fast-tracked through the process as if it were an extension.
To end a placement - follow the steps below:

Step one - enter live placement record

Step two - finish early

Step three - add new end date and press submit

Sonovate’s platform has been updated with new template terms and conditions (client and candidate) that reflect IR35 inside/outside requirements.
Sonovate does not require you to retrospectively issue these contracts to placements that went live before the 6th April.

A ‘Status Determination Statement’ (SDS) is a comprehensive statement from the client which:

For more information on SDS - please click here

Yes. Sonovate has created a range of placement types that will support the various IR35 statuses.
If the placement falls inside IR35, we can facilitate:
If the placement falls outside IR35, we can facilitate:
- Statement of Work (SoW)
- T&M based placements

If you have any queries or questions on the above, please reach out to our Customer Services team at customerservices@sonovate.com