New service eliminates risks of IR35 to temporary workers

Free insurance to cover costs and unexpected tax bills associated with a run-in with the Inland Revenue

A new fully interactive, managed payroll and accounting service* offering exclusive protection from the risks of failing IR35 has been launched by contractor specialist giant. The service for temporary workers offers unique, insurance against the costs and unexpected tax liabilities associated with defending and losing an employment status investigation by the Inland Revenue.

The IR35 rules were introduced to prevent ''disguised employees'', working as self-employed contractors through a limited company, reaping the advantages of generous tax treatment. They can reduce tax by taking a small salary, reimbursing expenses and paying the remainder of their income in dividends. This avoids national insurance contributions and in some cases higher rate tax.

According to giant, if the Inland Revenue establishes that a contractor has actually failed IR35, they could be liable for back payments of employers'' and employees'' national insurance and PAYE tax dating back to the start of their contract. In addition, they could face thousands of pounds worth of fees for professional advice to help fight their case - as well as substantial fines and interest payments.

The IR35 insurance - unique to giant powerhouse - covers contractors for up to 50,000 of professional fees and up to 20,000 per annum (this will cover the total liability of almost all contractors) against additional tax, interest and penalties arising if the Revenue wins their case.

Comments Matthew Brown, Managing Director of giant: All temporary workers are at risk of falling foul of the Inland Revenue over IR35. The resulting investigation into the contractor''s employment status can be expensive in terms of tax and professional advice, extremely stressful and can cause huge disruption to the contractor''s career.


By completing a simple on-line questionnaire to determine employment status, many contractors will find that they do indeed pass IR35 and can sign up for higher take home pay and guaranteed protection against the risks of failing IR35.

The new service provides temporary workers with a financial ''back office'', taking over the burden of all statutory administration. Once giant receives a timesheet from a contractor, they are responsible for the entire payment, administrative and statutory process from invoicing agencies (or end clients) to processing pay and submitting tax returns and accounts. Other advantages include:

Membership requirements

The key to the insurance is answering a few simple questions on line, to check the IR35 status and to ensure a clear history with the Inland Revenue. If giant powerhouse rejects the contractor as a fail IR35, the giant IR35 helpline offers free advice or they can transfer automatically to giant strongbox, an umbrella service offering similar benefits.