IR35 reforms and the small company exemption

IR35 reforms and the small company exemption
IR35 reforms and the small company exemption

posted 06 Dec 22

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

Search: 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.

About our expert

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

Need more guidance on IR35?

Whether you’re looking at the best ways to manage your contractors or you need support with your people strategy following the IR35 reforms, our recruitment specialists are here to help. Get in touch with the Search team today.

Don’t forget to check out our IR35 hub for more information, as well as helpful resources.