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Details on what this exemption is and what constitutes as a 'Small business'.
Quick Links
- Small Business Ruling
- What is a small business?
- Does Sonovate expect to receive a copy of Small Business Declaration document?
Small Business Ruling
If your client qualifies as a small business, your contract could be exempt from the Off Payroll (IR35) rules coming into effect from April 6th 2021.
What is a small business?
According to s382 Companies Act 2006 onwards the qualifying criteria for a small business is that it is meets two of the below:
- Turnover of £10.2m or less
- A balance sheet total (assets) of £5.1m or less
- An average of 50 employees or less
Balance sheet total is the total amounts shown as assets in the company’s balance sheet, before deducting any liabilities.
When considering the qualifying criteria, a corporate entity must look at the last financial year for which the period for filing its accounts, and reports ended before the beginning of the tax year to determine whether the tests are met.
A business will need to provide a Small Business Declaration document to prove it falls within this exemption.
To find out more about this, we recommend you visit HMRC's guidelines here.
Does Sonovate expect to receive a copy of Small Business Declaration document?
- We do not require a copy of this document fund your placements.
- We are currently working on developing the functionality for you to store this document or any other compliance documents onto the placement. Once that functionality has been deployed, you are more than welcome to upload them for safe keeping.