IR35: Information and Guidance
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CLIENT FEEDBACK
At Grafton, our Recruitment Consultants have found the service to be excellent. With increased margins and a simple referral program for our candidates, JMK have made the process extremely easy. I would not hesitate to recommend JMK
Louise
Business Manager
At Grafton, our Recruitment Consultants have found the service to be excellent. With increased margins and a simple referral program for our candidates, JMK have made the process extremely easy. I would not hesitate to recommend JMK
Louise
Business Manager
At Grafton, our Recruitment Consultants have found the service to be excellent. With increased margins and a simple referral program for our candidates, JMK have made the process extremely easy. I would not hesitate to recommend JMK
Louise
Business Manager
Off-Payroll Working (IR35)
The off-payroll working rules, IR35 as they’re commonly known, apply where the worker provides their services through their own limited company such as a PSC. The rules make sure that workers, who would have been an employee if they were providing their services directly to the client, pay broadly the same Income Tax and national Insurance contributions as employees.
Since April 2021 (April 2017 in the public sector) end users of a contractors services have decided the IR35 status of the engagement. Where IR35 applies, Income Tax and employee National Insurance contributions must be deducted from fees paid to HMRC, and employer National Insurance contributions and the Apprenticeship levy must be paid to HMRC by the company who pays the PSC. Unless the recruitment agency has a team who can facilitate these payments, this often results in the worker using an umbrella company to ensure compliance.
As an example, a contractor with an income of £100,000, would have a tax and NICs bill of £20,000.
If the contractor was found to have an incorrect IR35 determination, the end client could face a bill of £80,000 plus interest, penalties and fines.
HMRC are able to extend an enquiry back as far as four years.
Potential end client bill per contractor = (20% of total salary + interest + fines) x4
PSC Flex - The JMK Group UK Solution
Our solution, designed for contractors with their own Limited Company / Personal Services Company (PSC) who want to continue to benefit from the opportunity to work on contracts of their choice.
- Free of charge upgrade to PSC Flex
- Switch between Limited Company & Umbrella
- No restrictions to the number of times contractors switch
- All new PSC contractors automatically added
- End-to-end solution with IR35 guidance and support
- Contractors retain their dedicated accountant
Upgrading to our PSC Flex solution is free of charge and provides contractors with the flexibility to continue to process payments through their Limited company when they are deemed ‘Outside IR35’ and for those contracts where they are deemed ‘Inside IR35’, we will process PAYE payroll via our Umbrella service.
With end of year accounts and self-assessments included, our PSC Flex service gives your contractors total flexibility and 100% compliance at all times.
Contractor FAQ's
The IR35 rules were designed by HMRC to tackle “disguised employment”, a practice whereby a contractor provides their services through a Personal Service Company (PSC) in order to benefit from the tax advantages of being self employed, even if this does not accurately reflect their working practices.
Since 6th April 2017 in the public sector, and 6th April 2021 in the private sector , the end client has been responsible for deciding the IR35 status of every engagement with a PSC contractor.
Your client must take reasonable care in reaching their decision and give reasons for their conclusions. They must communicate their decision in the form of a Status Determination Statement (SDS) to your agency and the contractor. In practice the end user will probably try to issue the SDS before you start the assignment.
IR35 applies to a supply chain where the worker provides their services through an intermediary, usually a PSC.
Where the CIS contractor uses their own PSC, yes. However Sole Traders are not affected because IR35 only applies to incorporated companies.
The rules apply to all contractors who supply their services via a PSC.
The majority of your clients will have to apply the rules, however small businesses meeting two or more of the following criteria are exempt:
- Turnover of less than 10.2 million; or
- Balance sheet total less than £5.1 million; and
- No more than 50 employees
Many contractors/temporary workers will stop owning a limited company and move to being employed by an umbrella company, a preferred alternative by many recruitment agencies.
Speak to one of our specialist advisors as soon as possible, who will help you move from owning a limited company to being employed by an umbrella company.
Statement of Work contracts set out the project/work to be completed, as opposed to a requirement for a contractor’s time. These types of contracts do fall outside of the scope of the IR35 rules, however HMRC is aware of this and will actively challenge any contracts of this style which are used purely in an attempt to “get around” IR35.
A practical solution is for your agency to ensure that all PSC contractors who are or are likely to be assessed as “inside” IR35 are paid through an umbrella company who will deduct tax and NICs at source through PAYE.
There are several IR35 insurance products on the market, however you should take advice on your circumstances before choosing which one to use. Some of these products may not be effective, and in the worst cases, could create a tax liability that did not exist before. Speak to your insurance broker for more information.
Consultant FAQ's
The IR35 rules were designed by HMRC to tackle “disguised employment”, a practice whereby a contractor provides their services through a Personal Service Company (PSC) in order to benefit from the tax advantages of being self employed, even if this does not accurately reflect their working practices.
Since 6th April 2017 in the public sector, and 6th April 2021 in the private sector , the end client has been responsible for deciding the IR35 status of every engagement with a PSC contractor.
Your client must take reasonable care in reaching their decision and give reasons for their conclusions. They must communicate their decision in the form of a Status Determination Statement (SDS) to your agency and the contractor. In practice the end user will probably try to issue the SDS before you start the assignment.
IR35 applies to a supply chain where the worker provides their services through an intermediary, usually a PSC.
Where the CIS contractor uses their own PSC, yes. However Sole Traders are not affected because IR35 only applies to incorporated companies.
The rules apply to all contractors who supply their services via a PSC.
The majority of your clients will have to apply the rules, however small businesses meeting two or more of the following criteria are exempt:
- Turnover of less than 10.2 million; or
- Balance sheet total less than £5.1 million; and
- No more than 50 employees
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What Our Customers Say
Only had great experiences with JMK, as a teaching assistant. All of the staff were super helpful and informative, and the system was quick and easy to use once set up. I really appreciated the hard work from everybody I got to work with. - Thank you!
I run a fashion recruitment business and recommend JMK Group for umbrella services. We have worked with many umbrella companies for our freelancers and have never worked with an umbrella company like JMK Group, which is so professional.
We currently partner with several umbrella companies on our PSL, but JMK Group UK has quickly become our go-to choice. Their speed, accuracy, and honesty set them apart — qualities we can rely on week after week.
We’ve been dealing with JMK Group since 2015. From the outset, their professionalism and attention to detail have been second to none. The team at JMK made the entire payroll process seamless and stress-free, ensuring that every payment was accurate and on time.
Since 2020, JMK has managed payroll for Fraser Edwards’ temporary workforce, delivering excellent service throughout. Payroll is always accurate and on time, and any queries are resolved quickly and professionally. We highly recommend JMK for temporary worker payroll services.
Our agency had been working with JMK for a long time now and their most impressive attribute is their dedication to customer service. We are at a place where our working candidates that use their services are given transparency, commitment and a helping hand that shows they go above and beyond. Due to this we have a great relationship and long may it continue
JMK's service is amazing. They are always professional, adaptable, and eager to help. Everyone on the crew is extremely accommodating and willing to go above and beyond. I 100% recommend this company.
JMK's service is amazing. They are always professional, adaptable, and eager to help. Everyone on the crew is extremely accommodating and willing to go above and beyond. I 100% recommend this company.
Excellent company to work with. Responsive to queries, great customer service.
JMK are definitely raising the bar when it comes to Umbrella companies. We are a recruitment agency that have used various umbrellas in the past, however JMK come up top trumps.
Couldn't fault JMK in the slightest. Always happy to help with anything and never had a worker complain about them. Couldn't recommend them anymore!!
I have had the absolute pleasure of working with JMK for the past 2 years. They have always been professional, efficient and helpful whenever I have needed assistance.
JMK are raising the bar when it comes to support and help to persons using their services. Not only is their payroll professional and timely but their customer service is exceptional, they what to help. Excellent company.
Can't fault the service at JMK, always professional, flexible and happy to assist, hence why we have worked with them for the last 6 years! Everyone in the team is so helpful, and will go above and beyond. I would have no hesitation in recommending.
Always receive a good service from Jamil Elkorchi who goes above and beyond for our contractors getting them paid short notice and ensuring all their queries are answered.
Very reliable and organised. I have been working with Karla who helped with any questions or queries and she is very attentive. Highly recommend this company.
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01895 447800
Email Address
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sales@jmkgroupuk.com
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Highbridge House,
93-96 Oxford Road,
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UB8 1LU
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Cleerly is a mortgage and protection specialist that helps contractors, locums, young professionals, and those with complex incomes secure the right mortgage when high-street lenders may say no. With over 20 years of expertise, they work with lenders who understand umbrella companies, limited firms, and multiple income streams, often unlocking borrowing up to five times income with deposits as low as 5%. Alongside mortgages, Cleerly also offers life, critical illness, income protection, and home insurance, all delivered with clear, jargon-free advice designed to make the process simple and stress-free.
Penfold is a prominent UK pension provider, specialising in making pensions simple and accessible for the modern workforce. Focusing on self-employed individuals, freelancers, and small business owners, Penfold offers flexible and easy-to-manage pension solutions that fit the diverse needs of those without traditional workplace pensions. The company believes that everyone should have access to a secure retirement, regardless of their working structure, and has spent years working to simplify pension planning and make it more inclusive for all types of workers in the UK.
Thrivr offers an integrated Perks & Wellbeing platform designed to support and inspire employees through a single, seamless experience. Available on web, iOS, and Android, the platform brings together features like retail and travel discounts, wellbeing services (including mental health support and virtual GP access), financial tools, and sustainability perks. All of this is accessible with one login. Personalisation is driven by data, enabling users to track savings while employers gain insights to enhance engagement. Developed entirely in-house, Thrivr allows fast updates and custom branding so it looks and feels like an organization’s own portal. With instant savings of up to 40% on cinemas, retail, and fuel, and with flexible, industry-specific modules, Thrivr helps companies attract and retain talent while delivering real value.
At JMK Group UK, we understand that whether you are just starting your first assignment or are a seasoned self-employed professional with years of expertise, you shouldn’t have to navigate the risks of contracting alone.
Working as a contractor is defined by freedom, flexibility, and independence but that independence shouldn’t mean being left exposed. That is why we partner with Kingsbridge to ensure you don’t have to shoulder business risks by yourself. Through our partnership, we provide access to a high-value, comprehensive business insurance package specifically designed for contractors. This coverage is built to meet the exact requirements of your agency contracts and act as a vital failsafe should the unexpected occur.
By combining our payroll expertise with Kingsbridge’s specialized insurance knowledge, we offer products that are perfectly tailored to the unique needs of our contractors. Simply put: we have your back. We ensure you are protected if things go wrong, leaving you with the peace of mind to focus on doing what you do best.
At JMK Group UK, we recognise that protecting sensitive data and maintaining secure operations is critical for both our business and the agencies and contractors we support. That’s why we partner with Mitigo to deliver a robust and reliable approach to cyber security.
Our cyber security framework is strengthened through Mitigo’s extensive expertise, built from backgrounds in bank security, law, HR, and professional training. This depth of experience ensures a well-rounded and practical approach to managing digital risk in an increasingly complex threat landscape.
Through this partnership, we are able to implement effective security measures that help safeguard data, reduce vulnerability to cyber threats, and maintain the integrity of our systems. Combined with strong processes, ongoing awareness, and trusted partnerships, we provide a secure environment that protects our clients, contractors, and operations at every level.
Frequently Asked Questions
Was your question not answered? Please get in touch, we would love to answer it for you!
JMK Group UK are a payroll provider that was established in 2002, we have supported over 50,000 contractors and worked with over 900 recruitment agencies.
We are accredited with FCSA, QMS and Professional Passport. We process contractor payments through PAYE outsourced, Umbrella PAYE and CIS pay models.
We provide a hassle-free payroll service to cater for the recruitment industry, their contractors, and the UK temporary workforce across a multitude of sectors. JMK Group UK handle invoicing, statutory salary deductions, reporting requirements and payments from recruitment agencies or end clients.
Our service is designed for new and established contractors as well as experienced sub-contractors, so that they benefit from standard UK employment benefits offered to full time employed workers.
The JMK Alliance payroll service is a brand-new resource that can help bridge the gap between paying contractors and receiving a payment from your end client. The JMK Alliance can help you and your contractors with reliable and consistent payments from the very outset of your business.
JMK bridges the gap between the end hirer and the contractor, by making payroll ourselves. The invoice is raised to the end user, and even if they haven’t paid on time, we make the payments to the contractors. This gives everyone involved peace of mind and consistency.
A PAYE umbrella company is a standard UK limited company, operated by a third party acting as an ‘employer’ on behalf of its contractor employees.
A contract is signed between the umbrella company and recruitment agency (or end client) on behalf of the contractor who will be carrying out the assignment.
The umbrella provides a payroll service to its employees, processes all timesheets and invoices, and pays its employees a salary after allowing for deductions.
As an accountancy company, we understand the importance of effective financial management for our clients. Our team of experienced professionals can help clients maintain accurate financial records and ensure compliance with regulatory requirements. With our accountancy services, agencies and contractors can focus on their core activities, while we take care of their financial affairs. Our goal is to help clients maximise their profits, minimise their tax liabilities, and achieve their long-term objectives.
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