Preparing for IR35 changes

Posted on Thursday, February 6, 2020 by heather DuhigNo comments

Preparing for IR35 changes
 

How to prepare for IR35 April changes

 

What is IR35?

IR35 is the ‘off-payroll working’ rules for clients, workers and their intermediaries. These rules apply if a worker provides their services through an intermediary (a person who acts as a link between people). These rules ensure that workers providing services pay relatively equal tax and National Insurance contributions as employees who work directly with the client.

 

Who is affected by these rules?

  • Workers who provides their services through their intermediary
  • Clients who receives services from a worker through their intermediary
  • Agencies providing workers services through their intermediary

 

Rules prior to 6th April

Workers supplying services to a client in the public sector are not responsible for deciding their employment status, and this should be provided by the client.

If your client is in the private sector, the responsibility falls on the intermediary to decide your own employment status for each contract.

Rules after 6th April

All public sector authorities and medium and large-sized private sector clients will be responsible for deciding if the rules apply to the worker.

If you provide services to a small-sized private sector client, it remains your workers intermediary to hold responsibility for deciding the employment status.

How to prepare for the changes

If you are an organisation that has workers providing services through an intermediary, here is a quick breakdown for how to prepare for the changes after the 6th of April.

  1. Review your current workforce to identify all individuals who supply their services through agencies or other intermediaries.
  2. Determine if the off-payroll rules apply for any contracts that will extend beyond April 2020. You can check the employment status for tax on the GOV website.
  3. Discuss with contractors about if the off-payroll rules apply to their roles.
  4. Determine if the off-payroll rules apply to any future contracts you might establish.

 

More information can be found on the GOV website including specific information on how to work out if the changes apply to your company, changes for the intermediary and paying workers.

https://www.gov.uk/topic/business-tax/ir35

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