As of 6th April 2021 (this has now been moved from the 6th of April 2020 according to the chief secretary to the Treasury Steve Barclay) changes are being implemented to the off-payroll working rules, in which medium and large organisations in all sectors of the economy will become responsible for assessing the employment status of individuals who work for them through their own limited company.
It is important to note that these changes do not introduce a new tax or apply to self-employed individuals who are outside of the scope of the existing rules.
What Can I Do to Prepare?
- Look at your current employees (including people through agencies and other third parties) to identify individuals who are providing their services through a personal service company.
- Determine if the off-payroll rules apply for any contracts that will extend beyond April 2020.
- Start to discuss to your contractors about whether IR35 applies to their role.
- Put processes in place to determine if the off-payroll rules apply to future engagements. These might include who in your organisation should decide and how payments will be made to contractors within the off-payroll rules.
For more information about how to prepare and about the changes to IR35, please visit the HMRC website for more details: https://www.gov.uk/guidance/prepare-for-changes-to-the-off-payroll-working-rules-ir35