Connecting...

How are you dealing with the IR35 changes? Do you need help or a better understanding?

12 months ago by Daniel Stargatt
How are you dealing with the IR35 changes? Do you need help or a better understanding?

This year it was announced that there are going to be changes made to off-payroll working (IR35) rules, which will be effective from 6th April 2020.

These changes will affect any contractor working through a personal service company (PSC) and all medium to large sized end clients. So we wanted to help by sharing some key information.

What is IR35 story so far?

  • The off payroll working rules known as IR35 go back to 2000 when they were put in place to tackle what HMRC saw as the disguised employment of contractors supplying their services via Limited Companies / Personal Service Companies

In HMRC’s words


“The aim of the legislation is to eliminate the avoidance of tax and National Insurance Contributions (NICS) through the use of intermediaries, in circumstances where an individual worker would otherwise, for tax purposes be regarded as an employee of the client”

What is changing in the Private sector from April 2020?

 
The Government published draft legislation in July 2019 confirming that the rules which have applied to the public sector since April 2017 would be extended to the private sector from April 2020 with some notable changes. Beneath we highlight some but not all changes: 

  • End clients will be responsible for determining the IR35 status of the PSC’s that they engage with

  • There will be a small business exemption in line with Companies Act 2006 definitions

  • A new term “status determination statement” (SDS) has been introduced referring to the IR35 decision which must be passed down from the client

  • HMRC CEST tool is available to Check Employment Status for Tax, however this is not compulsory nor is there a formal appeal process

So, how will IR35 affect you?


We are working very closely with our leading FCSA Accredited umbrella company and have an in depth understanding of the IR35 changes and impact it shall have come next year.

To discuss in more detail please email Tina Pardoe, Business Manager on t.pardoe@project-resource.co.uk and she will be in touch to see how we can support your business during these legislation changes. We are keen to work with you to ensure it does not affect your business and impact your recruitment needs or work over the coming months.

Related jobs