IR35 changes: preparation starts here

HMRC has issued advice on how firms and individuals can best prepare for changes to the off-payroll working rules (IR35), which are set to come into force next year.

From 6 April 2020, the rules for engaging individuals through personal service companies (PSCs) will change. The responsibility for determining whether the off-payroll working rules apply will move to the organisation receiving an individual’s services.

To help businesses understand the issues and prepare for them, HMRC has published advice on its website in the form of a four-point plan:

  1. Look at your current workforce (including those engaged through agencies and other intermediaries) to identify those individuals who are supplying their services through PSCs.
  2. Determine if the off-payroll rules apply for any contracts that will extend beyond April 2020. You can use HMRC’s Check Employment Status for Tax service to do this.
  3. Start talking to your contractors about whether the off-payroll rules apply to their role.
  4. Put processes in place to determine if the off-payroll rules apply to future engagements. These might include who in your organisation should make a determination and how payments will be made to contractors within the off-payroll rules.
  • HMRC is currently running a consultation on the future of IR35. Details can be found at https://tinyurl.com/yyonpzsq. The consultation closes at 11:45pm on 28 May 2019.
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