Expert Advice

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n April 2021, the updated IR35 system went live, forcing off -payroll workers across the UK to re-examine their employment agreements, many of whom work in the health and fi tness industry.

Th e new IR35 regime, which requires trainers’ intermediaries to defi ne their employment status, might have slipped under the radar, but to avoid any issues with HM Revenue & Customs (HMRC), instructors need to keep on top of the least active part of their careers: the administration.

With intermediaries now playing a pivotal role, trainers must carefully consider their choices. Th ere are two routes they can explore: either setting up a limited company themselves or signing up with an umbrella company.

Limited companies give individuals more autonomy, but also mean that instructors must stay on top of administrative duties themselves. Alternatively, joining an umbrella company lightens the administrative workload, but does incur a fee and the loss of self-employed status. For some trainers, this is an attractive option as the lightened responsibility means they can focus on building a client base and delivering the best service possible.

In brief, an umbrella company gets paid for the work the instructor completes, and they then pay them

CHANGES TO IR35: WHAT’S THE FITNESS INDUSTRY’S NEXT MOVE? accredited, reviewed and audited companies is the best practice. Websites such as Trustpilot can be useful in Following our Spring 2021 article, Abigail Halcarz advises trainers and instructors on determining the validity and reliability of umbrella companies before any commitment is made. Off ers such as further complying with new tax regulations 80% take-home pay or suggesting that claiming expenses without receipts is allowed, often suggest that the company is not compliant with HMRC rules. Trainers will also want to avoid a company with unclear contract terms. Th ese range from having complicated payment regimes, with entry, leaving and document fees (such as submitting a P11D or receiving a P60), to ‘pay when paid’ clauses or any other unusual contractual obligations. Contract clauses should be laid out clearly, but it’s always good to double and triple check the fi ne print when signing up. Lastly, perhaps the best way to choose an umbrella company is through word of mouth, professional forums, or recommendations from professional “If their off er seems bodies, such as CIMSPA and the too good to be true, then it often is” Freelance and Contractor Services Association (FCSA). For added protection and clarity, employment legal experts can also help to identify the best through PAYE, deducting costs like approach for an individual. taxes, National Insurance Contributions Navigating changes to IR35 may seem and workplace pension payments. like an unnecessary headache but taking Paying these fees is essential, so it’s vital the time to decide on the best the chosen umbrella company carries employment path will prove valuable in out its monthly duties correctly. the long term. Whether that’s setting up Choosing the right umbrella fi rm can alone, or fi nding the right umbrella be a minefi eld, as not all are compliant company, there are plenty of options that with some tax regimes, but there are will allow trainers to continue to do what some ways that trainers can ensure they they do best: helping their clients. partner with the right company. Firstly, when it comes to umbrella Abigail Halcarz is an employment companies, if their off er seems too good specialist at law fi rm Shakespeare to be true, then it often is, so choosing Martineau