The general information about IR35 and the changes coming with this legislation can be found in much more detail. I will focus on how it will affect ECAA Turkish Businessperson Visa Holders. In simple terms, IR35 means IT contractors who do not work on strictly project-based roles need to pay PAYE which is basically employee-income-tax. The problem starts here because Turkish Businessperson Visa holders cannot pay employee-income-tax (PAYE) as their visa would be on danger if they pay such a tax. This unintended outcome of the legislation does not just bring more tax burden to ECAA Visa holders, but simply rules out any chance to work in such positions.

ARE ALL CONTRACT ROLES IN SCOPE OF IR35?

The answer is No, at least for a small portion. For a role to be outside of IR35, here a few general principles:

The contractor must be working for a certain project/service for a limited time.

The contractor must be able to send an alternative person to do the task or can do the task on her own time plan or location chosen.

The contractor must be using her own equipment and should not be benefiting any of the employee benefits (lunch, Christmas party, car park etc.)
If any of the criteria above (and few more which can be found in details of IR35 documentation) is not applicable, the role falls in IR35.
The last alternative is, even if the role is in the scope of IR35, working for small companies which are not held responsible for determining the status of contractors about IR35. A small company under this legislation is defined by:

• Annual turnover is under 10.2 million GBP
• The company balance sheet is less than 5.1 million GBP
• The number of employees is under 50
  

The problem starts when most of the big companies tend to see all contractors in IR35 to avoid any prosecution. Until April 2020, determining the status of the contractor regarding PAYE payments were a contractor responsibility. With IR35, this becomes a responsibility of the company and big companies want to ensure their contractors pay PAYE taxes through Umbrella companies. Starting small umbrella companies which are categorized as a small company under this legislation does not help as the rules apply to the end-customer. Even if you are contracting through a small company, as long as you actually work for a big company, you are under IR35 rules.

WHAT CAN YOU DO ABOUT IR35?

The obvious alternative is looking for roles that are outside of IR35, however, since the big companies, which are the ones who are paying most, currently tend to play it safe and categorize all contractors in-scope of IR35, this would minimize your chances.

The second alternative is to actually start a product/service-based startup company and really become a businessperson. But this alternative will require a good network and some capital which is not necessarily easily accessible in most cases for people who came to the UK recently.

Our proposal and recommendation to ECAA Turkish Businessperson Visa Holders who look for IT Contractor roles to work for startup companies which are the exceptions of this legislation. This might mean more modest rates, but we believe this will both improve your skillsets, network and open more opportunities compared to corporate working environments.

HOW CAN WORKING FOR A STARTUP BENEFIT YOU?

Working for a startup means working closely with the leadership team, being much more interactive, being able to observe the development of a company in the UK business environment. If you also are planning to stay in the UK for more than 5 years and aiming for ILR (Indefinite Leave to Remain), you might become a shareholder or even a senior employee of the company you helped to build as well. With stock options and growth opportunities, startup companies have a lot more untapped potential compared to a BAU (Business-as-usual) type of corporate role.

HOW CAN I WORK AS A CONTRACTOR FOR STARTUPS?

As Silverton HR Consultancy (www.silvertonhr.co.uk) we solely focus on Startup Companies and only do HR Consultancy (Reward, Organisational Development, Leadership) and Recruitment Consultancy for scaling startups. We are more than happy to introduce you to companies which are matching your experience and looking for people with your skillset.
Please get in touch with us at info@silvertonhr.co.uk if you are currently looking for a Contractor role in a startup company in the UK.