On 6th April 2020, the new off-payroll working rules, also known as ‘IR35’, will go into effect. IR35 will apply in situations where a worker provides their services through an intermediary (e.g. a personal service
company, a managed serviced company, a partnership or an individual).
In other words, the rules for engaging workers through contracted services are changing. While intermediaries are currently required to determine workers’ employment statuses for tax purposes in the private sector, IR35 will shift this responsibility to the organisation (client) receiving contracted services. Within the public sector, the majority of these rules are already in place. However, from 6th April 2020, public sector clients will hold additional employment status determination responsibilities.
These new rules will ensure that workers—who would have been considered employees if they provided their services directly to their clients—pay broadly the same tax and National Insurance contributions as normal employees. For further IR35 compliance guidance, click here.
The content of this Profile is of general interest and is not intended to apply to specific circumstances. It does not purport to be a comprehensive analysis of all matters relevant to its subject matter. The content should not, therefore, be regarded as constituting legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. Further, the law may have changed since first publication and the reader is cautioned accordingly.
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