With the announcement of the March 2020 Budget and new legislation the IR35 rules will now impact medium- and large-sized private sector businesses; small enterprises, as defined by the Companies Act 2006, will be exempt for now, with what classifies as a small business to be included in later legislation.
Those contracting in the private sector working for medium and large sized private businesses who have previously not been caught up in these rules will now be affected and will have to consider their position carefully.
Many of our contractor clients who are company directors operating through a personal services company or their own limited company have taken out life insurance or income protection designed for contractors to be owned and paid for by the business.
Individuals who now fall foul of this new legislation and decide to wind up their limited company and return to employment have a coupe of options to consider with their existing policies given they’re company-owned.
The main two company owned protection policies to consider are:
If you have either of these two policies and you’ve been caught up in IR35 and have wound up your limited company, then you need to carefully consider what to do next.
The best course of action will usually be to convert the policy into a personal plan as you can maintain the policy and pay the premiums from your personal bank account.
We can facilitate this switch fairly easily with a simple form and it means you won’t have to face further medical underwriting, which could go against you if you’ve suffered from any health conditions since taking out the company-owned policy.
If your circumstances are changing considerably then it might make more sense to have a chat to discuss your situation and check what adjustments need to be made to your personal protection.
For help and advice surrounding IR35 for contractors and others working through their own limited company in light of these changes to IR35, don’t hesitate to pop us a call on 02084327333 or email firstname.lastname@example.org.
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