Reform to the intermediaries legislation (IR35) in the public sector takes effect
Implementation date: 6 April 2017
New rules are introduced for public-sector employers in relation to the intermediaries legislation, commonly known as IR35, with the aim of tackling the avoidance of payment of employment taxes by individuals who work through intermediaries. Under the reform, where a worker is engaged by a public authority through an intermediary (usually the worker's own limited company or personal service company), the public authority will be responsible for deciding if the IR35 rules apply to the engagement. If the IR35 rules apply, the public authority (or agency or other third party paying the intermediary) will be liable for deducting and paying any income tax and national insurance contributions (NICs) to HM Revenue and Customs. It will also become liable to pay employer secondary Class 1 NICs. The legislation is introduced in the Finance Act 2017.