IR35-What is it and who does it affect from 6th April 2021?

IR35-What is it and who does it affect from 6th April 2021?

What is IR35?

You would have heard a lot in the news about a government crackdown on IR35, let us see what it means and who it affects and how it will be legislated

IR35 is a tax legislation that aims to stop individuals from avoiding tax payments to HMRC by supplying their services to clients through an intermediary, like a Limited Company rather than being on the payroll. Hence they are termed “disguised employees” by HMRC where for all intents and purposes look and act like employees. 

Employing individuals as “contractors” can save the business a significant amount of money since they do not have to pay Employer’s National Insurance contributions or provide benefits like pensions, holidays, sick pay etc.

 Changes from 6th April 2021 to the IR35 rules for the private sector

From 6 April 2021, medium-sized and large organisations outside the public sector will be responsible for deciding the employment status of contractors for tax purposes. Currently, contractors themselves are responsible for making this decision if they are providing services for organisations outside the public sector.

The reforms were announced in Budget 2018, and will bring the private sector inline with the public sector where these rules have applied since 2017. From April 2021, contractors who work through a personal service company (PSC) will be affected by changes to the off-payroll working rules.The rules aren’t changing for those PSC’s who are providing services to a small business. 

The reforms don’t introduce a new tax – they are designed to improve compliance with existing rules and make sure the right tax is paid from April 2021 onwards.

Who the rules apply to

Some rules already apply to all public sector clients, but from 6 April 2021 medium and large-sized private sector clients also need to apply them. The private sector includes third sector organisations, such as some charities.

The rules apply to all public sector clients and private sector companies that meet 2 or more of the following conditions:

  • Companies that have an annual turnover of more than £10.2 million
  • Companies that have a balance sheet total of more than £5.1 million
  • Companies that have more than 50 employees

Balance sheet total means the total amounts shown as assets in the company’s balance sheet before deducting any liabilities.

This is in line with the small companies’ regime.

The off-payroll working rules

The off-payroll working rules can apply if a worker (sometimes known as a contractor) provides their services through their own limited company or another type of intermediary to the client.

An intermediary will usually be the worker’s own personal service company, but could also be any of the following:

  • a partnership
  • a personal service company
  • an individual

The rules make sure that workers, who would have been an employee if they were providing their services directly to the client, pay broadly the same Income Tax and National Insurance contributions as employees. 

The client is the organisation who is or will be receiving the services of a contractor. They may also be known as the engager, hirer or end client. The client will be responsible for determining if the off-payroll working rules apply.

Change from 6 April 2021

From 6 April 2021, all public sector clients and medium or large-sized private sector clients (meeting the 2 of the 3 conditions mentioned in the third paragraph above)  will be responsible for deciding the worker’s employment status. This includes some charities and third sector organisations.

If the off-payroll working rules apply, worker’s fees will be subject to Income Tax and National Insurance contributions.

What the changes mean to :

Public sector clients or medium or large-sized private sector client Organisations

If the worker provides services to a public sector client, or a medium or large-sized private sector client, they:

  • should get an employment status determination from the client, as well as the reasons behind that determination
  • will be able to dispute the determination given to them if they disagree with it

Small-sized private sector clients

A small-sized client in the private sector will not have to decide the employment status of its workers. This will remain the responsibility of the worker’s intermediary (usually a limited company). However, the client must confirm their size if asked by the person or organisation you contract with, or the worker. This is to make sure that the client, agencies and workers can consider what rules apply.

Zyla insights: CEOs share their secrets to success

Zyla insights: CEOs share their secrets to success

Try to limit the ideal characteristics of a CEO into five things, what might you decide to incorporate? Many would say leadership, certainty, knowledge, courage, or communication, but are these the only qualities to look for in a CEO? 

Then again, an excellent CEO is somebody who’s equipped for handling their obligations and furthermore stays trusted and regarded as a leader for others; especially to their associates and workers. To do this, and support it, you need to have those exactly unmistakable qualities as a CEO.

In the last blog, we discussed the questions mentioned below with some of the top CEOs of different respective fields. Now, we are continuing the blog with the same questions, however, with different top CEOs of various companies. Let’s take a look at that: 

Question 1: What is most important to your organization—mission, vision, or values?

The mission is the structure of any business and vision is the food that drives your company forward. Your fundamental values are what keep you on point. Without clinging to a bunch of values, an association risks self-destructing. 

“Mission. It’s the building block of the company. Vision and values are rather soft, so they influence the direction we take to deliver our mission.” commented Nicolas Croix CEO of Moonworkers.

Bente Ottersen, CEO of Titles-On believes “I don’t think there are rankings for vision, mission and values. No organization can get by without all three.”

The significance of an association to build up a vision, mission, and values is significant for heading in the right direction. Without building up a mission, vision, and values, an association can’t recognize or explain itself to its employees and clients. 

“Studio Go Go was founded on a vision – the creative application of VR technology to create amazing ride experiences. After a period of intensive R&D this vision was crystallised into our mission to increase accessibility to the experiences we were creating. This is currently being transformed into experiential value that existing ride owners and their clientele will pay for” responds Brendan Walker CEO of Studio Gogo.

When asked this question to Rengin Ozturk CEO of Pink Positive, she replied “We try to make before and after as special as the big day itself for our customers through thoughtful gifts and a friendly shopping experience. We love being part of people’s happy moments, special celebrations and helping them deliver happiness to loved ones.”

Question 2: What do you think are the biggest business challenges today?

The COVID-19 crisis has sped up that transition in areas such as AI and digitization by several years. The workforce is automating fast, half of all work tasks will be handled by machines by 2025, the most competitive businesses will be those that choose to reskill and upskill current employees. The pandemic revealed vulnerabilities in the long, complicated supply chains of many companies, and so they have a big job rebalancing that.

In light of this question Bente Ottersen CEO of Titles-On said “In 2020 many companies were forced to build remote workflows with consequences such as reduced emissions from transportation, possibly zeroed out because of the added carbon footprint caused by the huge growth in internet use. The carbon footprint of our gadgets, the internet and the systems supporting them account for about 3.7% of global greenhouse emissions, similar to the amount produced by the airline industry globally.”

The COVID-19 crisis has been devastating for many small businesses. But the positive trend in entrepreneurship could bode well for job growth and economic activity once recovery takes hold.

The crisis disrupted the worldwide entertainment industry – and in particular, film and television production. Audio-visual productions were halted, cinemas were closed, events, premieres and entire marketing and distribution campaigns were postponed or cancelled. 

Brendan Walker, CEO of Studio Gogo, commentedThe biggest challenge today is finding ways to access an audience that’s becoming increasingly fluid and distributed. Our audience either expects access to entertainment on-demand or destination experience events such as festivals. The challenge facing us is to remain agile and able to embrace new opportunities as we discover or develop them.”

“Whether we sit in a pandemic world or not, business development is always the most challenging part of any business,” replied Nicolas Croix CEO of Moonworkers.

Rengin Ozturk CEO of Pink Positive remarked “It was, and it will always be, scaling up with profitability and good cultural values. Remarkably, more and more companies adopt a good cause to build their success on top. As a small business, we love working with brands that support small and local businesses and make informed purchases. On the other side, multichannel communications within the company and 3rd parties, accompanied by increased working from home, put people under stress. It is challenging to keep the work-life balance where our mobiles keep our social and work lives on the same screen. It requires 12-14 hours of daily work as I keep micro-managing. My 2021 resolution is handing over more work to my colleagues.”

Question 3: What are the most helpful technological platforms and tools you are using?

Bente Ottersen, CEO of Titles-On commented We use some proprietary tools and platforms that are specific to our business. Titles-On Ltd is engaged in borderless Internet and e-commerce B2B transactions, providing subtitling, captioning, dubbing and audio description for broadcasters and video streaming platforms.

“Right now we’re using Google’s GSuite across our organisation, and getting plenty of use from Meet (much preferred to Zoom and other video conferencing alternatives). Trello, GitHub, BitBucket and Unity are all part of our digital production pipeline and project management. SketchUp and TurboCAD are used for 3D design and fabrication – which includes rapid prototyping,” replied Brendan Walker CEO of Studio Gogo in this context.

Rengin Ozturk CEO at Pink Positive gave a very detailed answer, she saidI worked in marketing for top IT brands for 11 years, and my partner is an IT consultant. I can honestly say that I’m a tech addict. Some apps I use daily for work purposes:

  • Adobe Creative Cloud: So many apps and content for design and marketing
  • Lastpass: Safe and practical password app with a good mobile integration
  • Xero & Receiptbank: Easy bookkeeping if you have too many transactions.
  • Tailwind: For Instagram and Pinterest post scheduling
  • Trello: An excellent planning and collaboration app
  • Any Cloud file storage: Love having everything on the cloud to work freely, regardless of machine or place.
  • Canva: Easy design for social media posts
  • Upwork: When you need a project-based hire with experience.

Carrying the discussion further Nicolas Croix CEO of Moonworkers said that his company uses G Suite, Django, and Facebook. 

Question 4: Tips/Suggestions you would give to new entrepreneurs to help them make fewer mistakes on their journey?

There are many books or pieces of training available here and there that sell ready-made recipes to start an agile start-up or a profitable digital business at no cost. In practice, that’s very rare. Otherwise, every entrepreneur would release their story. It’s probably one business out of a million that starts this way. So, don’t assume it will be yours.

In light of this question, Rengin Ozturk CEO of Pink Positive said “Ask others! Small business owners are a huge and supportive community. We love sharing information and sharing the resources we have. Done is better than perfect! It would be best if you had a good plan but do not lose yourself in planning. Use that time to train yourself in the job and quickly adapt to new situations. Be kind! Be kind to your employees, vendors, competitors and yourself. “

Bente Ottersen, CEO of Titles-On replied honestly that “Build a team, don’t try to do everything yourself to perfection. If you don’t delegate, ultimately less work is getting done, your growth is halted and you may burn out. Don’t trust anybody blindly. Use NDAs. It’s fine to start a business with a friend. Just make sure you’re careful about who you partner with and confirm that you have full transparency on all company dealings.”

Brendan Walker CEO of Studio Gogo answered “I set up Studio Go Go with the aim to create, capture and apply intellectual property to generate value in ways that could be monetised and scaled up (previous to this I’d been running a design consultancy, which was profitable, but not scalable). I was awarded an InnovateUK Audience of the Future Grant in the first year of startup, which came with very precise requirements for reflecting, recording, and reporting on my business as it grew.“

We should not compare ourselves with other businesses. This is a trap we all fall into, and there’s no good in it. It just feeds the imposter syndrome and disconnects you from your creative self. Keep your distance from competitive people to keep your path clear.

In this discussion, Nicolas Croix CEO of Moonworkers added “I would say that the most important factor to evaluate is timing. Most of the mistakes arise because you make that decision either too early or too late. For example, when is it a good time to invest more in your website, a marketing campaign, or develop that feature that you think customers want? The second factor, of course, is money. If you think you can access enough funds in order to set up your business and cover some “unknown unknown”, namely a few mistakes that you’ll make as part of the learning process. I guess one can be defined as risk-averse or risk-taker depending on how much money they are lacking when igniting their entrepreneurial journey.”

Question 5: What is one positive that came out of the pandemic for your business?

Pandemic has helped multiple businesses to define their values. Many of them decided to sell less during the worst periods rather than putting anyone at risk. 

Nicolas Croix CEO of Moonworkers replied “At this stage, it’s difficult to draw any conclusion yet. I assume that the pandemic will reshuffle the competition for 2 main reasons. First, established companies may experience cash flow problems like never before when they will restart their activity at full capacity. Second, it is very likely that consumer behaviour will change.

“The fact that online retail has progressed 3-4 years in the last year due to the various lockdowns. We are as happy as anyone to see things opening up again but also grateful for the progress that has been made,” observed Martha Keith, CEO of Martha Brook.

“Be aware of copyrights and Intellectual Property. Even innocent uses of someone else’s IP, such as their photographs, artwork, and more, can wind up costing you thousands.” Bente Ottersen, CEO of Titles-On mentioned.

This covid-19 has affected many SMEs without a doubt but the fact that many businesses still found a way to flourish can not be forgotten. 

In this case, Rengin Ozturk CEO of Pink Positive said, “We were primarily focused on weddings before the pandemic and lockdown thought us and tested our ability to pivot quickly. Over seven days, I changed the whole product range operating on three different sales channels with new designs and all the back office work it brings as listings, photography, print works and stocks.”

Brendan Walker, CEO of Studio Gogo, enlightened the mood by commenting,During the lockdown, I’ve had unlimited access to amusement park rides for research and development. They still get run regularly for maintenance, but without the public. Of course, now we’re ready to launch our ride, I need the public to come back again!”

To sum up: 

Moreover, the CEOs were being requested a few ideas which would give further direction to the novice start-ups and SMEs. So, Brendan Walker CEO of Studio Gogo suggested that “It’s good to have people who can act as a sounding board, and offer practical advice: from recruitment down to intellectual property law.”

Hopefully, you liked the session. If you have any other suggestions for the young entrepreneurs out there comment below and let us know.

Key Participants:

Nicolas Croix

Founder at Moonworkers


Bente Ottersen

CEO of Titles-On


Brendan Walker

Founder of Studio Gogo


Rengin Ozturk

CEO Pink Positive


Zyla insights: CEOs share their secrets to success

Zyla insights: CEOs share their secrets to success

Success doesn’t happen overnight, it takes strength of character, resilience, and most importantly persistence & determination to work hard each day. Failures are the stairway to success. 

Be it the revolutionary CEO of Bumble, Wolfe Herd, or the innovative CEO of Pepsico Indra Nooyi, each successful CEO out there has the above-mentioned qualities in common. Our team at Zyla was very keen to know exactly how successful CEOs go about their strategies so we recently did a survey recently amongst our clients and asked the CEOs some questions to gain insights on the key to success. 

Question 1: What is most important to your organization—mission, vision, or values?

Out of the responses we got, most of the CEOs view mission & vision as equally important since it allows the business to be result-oriented, focussed & innovative.

Hannah Fairgreave who is the Founder and CEO of Frenchie Wandsworth believes that all three are equally important, however, vision is what she has her eyes focused on currently.

Henry Oakes, Managing Director of UK Settled said: “We’re most vision focused. With what we call ‘tap-to-buy property’, we believe that in the future buying a house will be as smooth and reliable as ordering a takeaway has become! But it’s an ambitious plan, so it requires steadfast focus on a vision of how things could be improved. “

“Mission, followed by values. We call our values our operating system,” quoted Natasha Vernier, Founder and Chief Executive Officer of Cable.

Mission and vision are important as they keep the business focused and innovating, however, values are more important. Adding to this, Talal Choucair, Co-Founder and CEO of MyQuickCloud responded, “Having a happy and content workforce is more productive. Also, providing quality products and great client services builds trust and loyalty with clients.”

 “It would previously have been the vision but the longer we are in business the more we realise that values are the key driver of success and they guide us and our team in everything we do. We have an acronym for our values that spells DERICK!” mentioned Martha Keith CEO of Martha Brook.

Question 2: What do you think are the biggest business challenges today?

The year 2020 has been all about challenges and has affected each & every business owner in some way or the other. It’s imperative to recognise and understand the challenges at hand and change the way we work to make the best out of the new paradigm.

In this context, Talal Choucair takes a very realistic stand: “Understanding and adapting to the changing way of living and working. Perfectly using technology and cloud services is as important as keeping in touch with people you can trust and rely on. For example, with remote working, businesses need to move away from micromanagement and shift toward project-based management.”

Staffing & recruitment are other troubling factors for entrepreneurs. However, Hannah has found a way to deal with it:

“Covid!!! Having to adapt to the erratic changes at such short notice is extremely hard. I’ve decided to employ staff pre full opening in the hope they’ll stick around for the busy times”

In this current state of turmoil, ‘Focus’ is definitely a pain point for many business owners. When there are so many things you could do it’s hard to decide what you should do.

Natasha Vernier responds “I think it varies very much by industry. For us specifically, it’s trying to persuade people to do something that they have done for years or decades in one way, in a different way.”

“We operate in the consumer retail environment and the biggest challenge is keeping relevant, up-to-date and in tune with our community of stationery lovers. This helps us to stay ahead of the competition and build customer loyalty. Keeping in tune with our community across many channels is an ever-evolving challenge but it is one that we love!” thinks Martha Keith.

Henry Oakes expresses, “I think the biggest challenge for businesses today is planning in uncertainty. Startups like ours are used to business being unpredictable, but with the pandemic, now all businesses face unprecedented uncertainty. In retail, for example, you’d think that the January Sales follows the Christmas surge just as night follows day, but 2021 has taught us not even that can be relied upon.”

Question 3: What are the most helpful technological platforms and tools you are using?

No surprises that the most helpful tools we use are those that foster remote collaboration, seeing as we’re all at home at the moment.

“We have just started using Twist to communicate asynchronously about topics, and that is proving useful. Other than that, Slack, Google Meet, Asana etc,” commented Natasha Vernier.

Many of our work is centralized in one place making access, security, backups, and collaboration easier, productive and reliable.

Hannah Fairgreave believes that Instagram is massively important to and establishing an organic following which engages and spreads the word. She says, “Zettle, our till system is awesome and so simple to use. I can track sales throughout the day by just opening my app. The starling bank app, personally I believe it’s one of the best out there for simplicity. Its layout is everything you need as a new business owner.”

On this Talal Choucair mentioned “We use Agile platforms and tools for breaking down projects into weekly deliverable tasks, scheduling and fine-tuning. We also have virtual offices/workspaces in the cloud so even though we use many SaaS platforms.”

Henry Oakes remarked, “But even before the pandemic, the Google suite (we use almost everything, but particularly Docs, Slides, Sheets) has been critical for us.”

Martha Keith, added Aside from social media, moving to WooCommerce as the platform for our new website has been key. Online accounting and Dext (Receipt Bank) are also key to smooth operation and efficiency.”

Question 4: Tips/Suggestions you would give to new entrepreneurs to help them make fewer mistakes on their journey?

The only thing an entrepreneur can be certain about is they’ll make mistakes, so there’s no point in wasting time trying to eliminate them.

There is strength in number and often the ideas you start with are not the ones you end up turning into products and services: internal and external feedback is a must.

“Speak to other founders! There are so many small pitfalls, or tips to avoid spending hours reinventing the wheel.” believes Natasha Vernier.

In this case, Henry Oakes mentioned, “I’d suggest the complete opposite actually. Trying to eliminate mistakes will slow you down, and lack of speed is the far bigger startup killer. Instead, focus on improving the speed with which you learn from inevitable mistakes.”

Businesses should learn to delegate and control rather than try doing everything themselves. You should be kind and helpful to everyone on your journey as you may need to lean back on them one day.

Hannah Fairgreave also thinks that “Speak to other people in the same industry who are already established. Go and observe for a day or volunteer, really get to know the business you’re starting.”

“Try new ideas out on a smaller scale first to test customer reaction/suitability/operational process before scaling up. If you can, get some experience first working for another company in the area you are setting up in,” concluded Martha Keith.

“Get organized from the start, using the right technologies and methodologies to become productive and cost-efficient.” Talal Choucair commented.

Question 5: What is one positive that came out of the pandemic for your business?

Helping people stay in business, continuous lockdowns, social distancing, collaborating, and easing the pain of moving away from physical offices are some challenges affecting SMEs.

“Technology and Cloud hosting is daunting for most small businesses and they find it intimidating when they have to do it on their own. Knowing that we are removing the stress by managing their cloud servers, workspaces and backing up all the data is rewarding for both us and them,” replied Talal Choucair when asked this question.

“Luckily for us, we were able to stay open throughout, it then turned out to be one of the only things you could do during a pandemic (take out coffee/food and a walk). We’re super grateful for that,” observed Hannah Fairgreave.

Amidst the pandemic, the government tried its best to support SMEs, and businesses themselves should support each other in every possible way.

In this outline, Henry Oakes noted “It forced us to think very hard about our vision and whether we were optimally set up to achieve it. This made for some difficult decisions, but we now have a renewed focus that has stood us in good stead to achieve our goals in 2021.”

Natasha Vernier responds, “No rent = more money! Also, we have had to be really proactive and intentional about spending time just socialising, which has been great.”

“The fact that online retail has progressed 3-4 years in the last year due to the various lockdowns. We are as happy as anyone to see things opening up again but also grateful for the progress that has been made,” observed Martha Keith.

To sum up:

Additionally, the CEOs were being asked for some suggestions which would give further guidance to the amateur SMEs. Talal Choucair suggested that “The old pattern of micromanagement, carrot and stick approach is not efficient, I would advise entrepreneurs to read “Drive, by Daniel Pink” to understand how to build a more efficient and innovative workforce.”

Adapt with the times, learn along the way, engage as much as you can and ask for help whenever you need it. “People always want to help, just make sure you’re there to help in turn. People will appreciate kindness and thoughtfulness in the long run,” concluded Hannah Fairgreave.

Hopefully, you liked the session. If you have any other suggestions for the young entrepreneurs out there comment below and let us know. Look out for more insights from our clients in the next edition!

Key Participants: 

Henry Oakes

Managing Director of UK Settled


Natasha Vernier

CEO Cable Technology


Talal Choucair

CEO My Quick Cloud


Hannah Fairgreave

CEO Frenchie Wandsworth


Martha Keith 

CEO of Martha Brook


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