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IR35

Clio SpringerEditor's message: The Government is postponing the reforms to IR35 in the private sector to 6 April 2021, in response to the coronavirus (COVID-19) outbreak. The Government had intended to introduce the IR35 reforms from 6 April 2020, bringing the requirements in the private sector in line with those in the public sector.

IR35 (also known as the "intermediaries legislation") is likely to apply where an individual provides their services to a client via an intermediary such as a personal service company (an arrangement known as "off-payroll working"), but the relationship with the client would otherwise suggest employment status. If IR35 does apply, the intermediary must operate PAYE and deduct income tax and national insurance contributions on salary paid to the individual.

Since April 2017, where the client is in the public sector, it has responsibility for determining if IR35 applies where the individual provides their services via an intermediary. If they would otherwise be regarded as an employee if the arrangement was not through their intermediary, the public-sector client must make PAYE deductions.

The Government intended to introduce the same requirements on private-sector clients from 6 April 2020 (although small businesses would have been exempt). When the reforms are introduced from 6 April 2021, the client receiving the off-payroll workers' services will be responsible for deciding the individual's status and operating IR35, rather than the individual who is being engaged.

Clio Springer, senior employment law editor

New and updated

  • Type:
    Employment law manual

    Pay As You Earn

    Updated to include a reference to a consultation on proposed NIC relief for employers of armed forces veterans, which the Government published on 21 July 2020.

  • Date:
    17 July 2020
    Type:
    News

    We cannot delay IR35 reforms any further, government says

    There should be no further delay in addressing the long-standing 'unfairness' of contractors paying less tax than employees in situations where their work should be classified as an employment relationship, the government has said.

  • Date:
    2 July 2020
    Type:
    News

    IR35 changes will go ahead in April 2021

    The changes to off-payroll working rules in the private sector, known as IR35, will go ahead in April 2021 after MPs voted against an amendment to delay them for at least two years.

  • Date:
    20 May 2020
    Type:
    News

    Proposed delay to IR35 fails to gain support

    A proposed delay to the extension of IR35 rules to the private sector has failed to gain support in parliament.

  • Date:
    28 April 2020
    Type:
    News

    House of Lords: IR35 'riddled with problems'

    The IR35 rules are 'riddled with problems, unfairnesses, and unintended consequences', according to a House of Lords committee looking into the impact of off-payroll working reforms.

  • Date:
    22 April 2020
    Type:
    News

    House of Lords committee reveals IR35 concerns

    The House of Lords committee looking at the proposed extension of IR35 regulations to the private sector has written to the Treasury with a list of damning concerns about the proposed reforms.

  • Date:
    18 March 2020
    Type:
    News

    IR35 reforms postponed until April 2021

    Changes to the IR35 off-payroll working rules in the private sector have been delayed by 12 months in response to the growing business uncertainty surrounding the coronavirus pandemic.

  • Type:
    Legal timetable

    Reform to intermediaries legislation (IR35) extended to private sector

    Updated to reflect that the reforms to the IR35 rules in the private sector, which were due to come into force on 6 April 2020, have been delayed until 6 April 2021.

  • Type:
    FAQs

    What is IR35?

  • Date:
    17 March 2020
    Type:
    Podcasts and webinars

    Webinar: How IR35 will impact your organisation

    Kate Upcraft, payroll consultant and lecturer, explains how IR35 will affect your organisation and the practical steps that you need to take to ensure that you remain compliant with the law and manage any additional liabilities.

About this topic

HR and legal information and guidance relating to IR35.

IR35: Key resources

Tools for pay specialists