The off-payroll working rules (otherwise known as IR35) are designed to crack down on "disguised employees". IR35 will apply if an individual provides their services through an intermediary but they would be classed as an employee for tax purposes if they were engaged directly.
IR35 will require organisations engaging these individuals (whether contracting directly with the PSC, or via a third party such as a labour agency) to assess if the IR35 rules apply to the engagement. Currently this is the PSC's responsibility.
It is currently planned that IR35 will apply to the private sector from 6 April 2020. We highlight that in early January HM Treasury announced that a review of the changes to "address any concerns from businesses and affected individuals about how they will be implemented" is to be carried out. The tone of the announcement is one of ensuring a smooth implementation rather than resulting in fundamental changes to the new rules themselves. The review is due to complete by mid-February and may result in no changes or simply produce a delay to implementation. For the time being, organisations need to prepare for a 6 April 2020 implementation date.
How we can help
We can provide you with the support and advice you require to manage the introduction of IR35. We can also offer the following for fixed fees:
- A meeting to discuss strategic advice on IR35. This might involve considering some of your engagements where the IR35 status isn't clear cut and considering whether those who fall within IR35 are workers or employees;
- A simple guidance note for managers introducing IR35;
- A checklist of factors to consider when deciding if a contractor falls within IR35, to supplement your use of the HMRC CEST tool;
- A template IR35 status determination statement; and
- A template contract with a PSC or a review of your existing contract.
Please get in touch to discuss your needs.
