Off—payroll working rules will change in April 2021
The new off-payroll working (IR35) rules were due to be implemented in April 2020, however due to the on-going economic impact of Coronavirus the new legislation has been pushed back to April 2021.
The off-payroll working (IR35) rules will see individuals who provide personal services via an intermediary change for medium and large-sized businesses in the private sector. This followed a consultation in the summer of 2018 on how to tackle non-compliance with the intermediary’s legislation (IR35) in the private sector. The legislation was applied to the public sector in 2017 and treats individuals who effectively work as employees to be taxed as employees, even if they continue to structure their work through a company.
Businesses need to be prepared for this legislation which places the employment tax compliance burden on the agencies and companies which engage contractors who use Personal Service Companies.
This is a complex area and HMRC have provided detailed guidance which you can read here
There is quite a lot to prepare ahead of the new rules, if you need any support with this please get in touch with the Clear Vision team, call us on 01794 330025 or email us.