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​For our Ask the Experts IR35 question and answer series, we spoke to Paul Chamberlain, Head of Employment at JMW Solicitors about the small company exemptions following IR35 reforms in the private sector on 6th April 2021.

What is the small company exemption?

Paul: The new IR35 rules do not apply to all types of end-user hirers. There are exemptions for companies that qualify as small businesses.

According to the Companies Act 2006, a company will qualify as a small business if they meet two or more of the following requirements:

  • They are in their first financial year

  • They have an annual turnover of less than £10.2 million

  • They have a balance sheet total of less than £5.1 million

  • They have less than 50 employees

If two or more requirements are met, the responsibility for enforcing the new IR35 rules stays with the intermediary.

Looking for more guidance on IR35 reform?

Don't be unprepared for IR35 reform. If you need some help navigating through the IR35 changes, then we’re here to help. Whether you’re exploring the best ways to manage your contractors, or need support with your people strategy following the IR35 reform, get in touch with the team today.

Check out our IR35 hub and our IR35 helpful resources for further information on the upcoming changes.​

About our expert

Paul Chamberlain

Paul Chamberlain is Head of Employment at JMW Solicitors. He has nationally-recognised expertise in the law relating to the recruitment industry, advising and providing training on employment status issues, the Agency Workers’ Regulations, GLAA matters, the Working Time Regulations and industry-specific regulatory compliance matters.

Connect with Paul