For assignments taking place for clients after 6 April 2021, it is the client’s responsibility, instead of the freelancer’s, to prove IR35 compliance (with some exceptions). The legislation only applies to services by freelancers who operate via a Personal Services Company (PSC).
The client is legally required to carry out an IR35 assessment and provide the result to YunoJuno for each booking offered involving a PSC freelancer, in the form of a Status Determination Statement (SDS). The SDS records the result of the IR35 assessment, and the reasons that went into reaching it and the PSC freelancer will be able to see the assessment result & download the SDS before they accept.
The possible IR35 assessment results, which will be reflected in “pips/badges” around the platform, are:
Outside IR35
The working practices of the assignment indicate that the PSC freelancer is not an employee for tax purposes; the PSC freelancer will invoice us on timesheet submission and we (as the fee payer) will pay the invoiced amount, without IR35 deductions, into the PSC freelancer's business account within 14 days of timesheet approval. Please note that when freelancers are directly invited by a client, client payment terms might apply.
Inside IR35
The working practices of the assignment indicate that the PSC freelancer is an employee for tax purposes. The necessary employer and personal taxes will be deducted, before paying the PSC freelancer's business account directly with the remaining amount. Employee income tax and national insurance will be paid to HMRC.
The PSC freelancer may appeal the assessment result, but they must provide reasons that their working practices for the particular assignment have been incorrectly assessed by the client.
Client is exempt from the April 2021 rule change
If the assignment is for a client that is exempt from the rule change, then the pre-April 2021 rules will apply and it will be the PSC freelancer’s responsibility to correctly assess whether the contract sits within IR35 or not, and to adjust their taxes accordingly when they do their self-assessment return.
Payment to the PSC freelancer in these cases will be with YunoJuno as the fee payer.