Inside IR35 payment process when paid by YunoJuno
Laura avatar
Written by Laura
Updated over a week ago

Freelancers operating via a Personal Service Company (PSC) are subject to the UK’s IR35 rules. All public authorities and medium and large-sized clients outside the public sector are responsible for deciding if the rules apply and informing YunoJuno of the result of the assessment. If a client assesses an assignment as Inside IR35, the law says tax must be paid directly to HMRC. If this isn’t done correctly, there can be serious tax consequences (including interest, fines and penalties). YunoJuno will administer all Inside IR35 assignments.

The IR35 rules only apply to PSC freelancers. The rules do not apply to Sole Trader or Umbrella freelancers on the YunoJuno platform. Small businesses or businesses with no links to the UK are exempt.

Applicable clients must do an assessment of the working practices for every contract with a PSC freelancer. The result will be either Inside IR35 or Outside IR35. The applicable client passes the result (and the reasons for it) to YunoJuno and the PSC freelancer in a document called a Status Determination Statement (SDS). PSC freelancers will not get an SDS from an exempt client. For exempt clients, the old rules apply and the PSC freelancer is still responsible for making a self-assessment and telling HMRC about any Inside earnings in their tax return.

What will happen for an Outside IR35 status?

On the YunoJuno platform, applicable clients will provide the SDS, but other than that, nothing will change. PSC freelancers will contract with YunoJuno and YunoJuno will pay their PSC gross (plus VAT, if registered).

What will happen for an Inside IR35 status?

On the YunoJuno platform, applicable clients will provide the SDS, but the contract and payment mechanics will be slightly different.

Managing HMRC obligations appropriately requires specialist knowledge. YunoJuno will provide help and support to PSC freelancers to help them understand their own personal tax consequences for an Inside IR35 assignment.

In HMRC-speak, YunoJuno will be the “fee payer” and the “deemed employer” of the PSC freelancer. YunoJuno will ensure that all the correct deductions and payments are made.

With the exception of the self-billing service where freelancers do not need to upload an invoice, all aspects of YunoJuno remain the same.

How will an Inside decision affect payments to PSC freelancers?

Firstly, the 14-day payment guarantee that YunoJuno offers to all freelancers will remain.

What YunoJuno can do on the platform (because we want to be very transparent) is provide PSC freelancers with a calculator that helps them understand how the deductions for Inside IR35 assignments will work. Here is an example of the calculator:

YunoJuno provides the calculator to support and give an indication of the net payment freelancers will receive. The reason we can not provide the exact net pay is that we'll still need to know the personal tax code.

Here is an example of an inside IR35 payment based on the following assumptions:

1) A Freelancer Assignment Fee of a single day at £300;

2) A Basic Rate tax code

There are business costs involved in being the “deemed employer” under IR35 and YunoJuno will charge a 1% operating margin. Please note, the Employers National Insurance and Apprenticeship Levy which makes up 12.38% of the 13.38% costs is a straight 'pass-through' charge and YunoJuno does not make money off this transaction other than the 1% operating margin.

NB: Some figures are rounded to the nearest pound.

Click here to see the calculator.

How will billing work for Inside IR35 assignments?

The process is:

  • Freelancer submits their YunoJuno timesheet.

  • Client approves timesheet (and provides YunoJuno with a valid internal client PO number along with it, if necessary).

  • Freelancer gets paid within 14 days.

YunoJuno is providing a self-billing service and the freelancer invoice, payslip and remittance advice documents will be available through YunoJuno. Freelancers can download their documents through the payments tab:

Are there other options available for PSCs taking Inside IR35 assignments?

No, due to the complexities of the legislation and the payroll specifics involved all PSC freelancers taking inside-IR35 assignments will be required to take this route. There are however other routes available to the freelancer, which may be helpful in making the final decision.

When do I get paid?

We pay freelancers booked through YunoJuno Marketplace within 14 days of timesheet approval (by the hiring client). Please note that when freelancers are directly invited by a client, client payment terms may apply.

How do I update my payroll details?

View an Inside IR35 contract and select 'Update payroll details':

Please note, you must provide a business bank account.

How do I access my Inside IR35-related documents?

Select your profile icon and select 'Documents':

How do I download my invoice, payslip, and remittance advice?

Once they have been uploaded you can download your invoice, payslip, and remittance advice from the payment timeline within the payments tab:

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