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Off-payroll working and IR35

From 6th April 2020 the Government is proposing to bring in new rules that will replace IR35 (off-payroll working through an intermediary) for certain businesses.

The changes will not apply to companies that meet any 2 of the following tests:

a) turnover not more than £10.2m;

b) balance sheet not more than £5.1m; or

c) employees not more than 50.

If you don't meet any 2 of the above tests and you engage with contractors through their personal service companies ("PSC") you as contractor will have to decide whether the person who provides the work is deemed to be an employee or not.  If you deem that person to be an employee, you as contractor will be required to deduct PAYE and NICs from payments you make to the PSC.  A similar regime is currently in force for the public sector.

It is anticipated that HMRC will launch an interaction service which is similar to the check-employment-status-for-tax check, click here to find out more.

 

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