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IR35

Clio SpringerEditor's message: PAYE generally applies only to employees. However, there are circumstances where individuals who might not immediately appear to be employees are subject to income tax and national insurance contributions (NICs). 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, then IR35 (also known as the "intermediaries legislation"), is likely to apply. If it does, the intermediary must operate PAYE and deduct income tax and NICs 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 intends to introduce the same requirements on private-sector clients from 6 April 2020 (although small businesses will be exempt). 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.

Following the general election, the Government is carrying out a review of the changes to off-payroll working, but it has confirmed that the reforms are still due to go ahead.

Clio Springer, senior employment law editor

New and updated

  • Date:
    9 January 2020
    Type:
    Legal guidance

    The new year begins with a new government, the prospect of Brexit and a number of employment law developments already on the horizon. What does HR need to do to meet its obligations and prepare for the year ahead?

  • IR35: Review into off-payroll working changes launched

    Date:
    8 January 2020
    Type:
    News

    The Government has launched a review into changes to IR35 off-payroll working rules just three months before their planned introduction into the private sector.

  • Pay As You Earn

    Type:
    Employment law manual

    Updated to include a reference to the Government's review into the implementation of the off-payroll working reforms.

  • Date:
    3 December 2019
    Type:
    Legal guidance

    HR professionals in public authorities may think that the extension of IR35 reforms to the private sector in April 2020 will not affect them. However, public-sector bodies need to be aware of some proposed changes to the rules.

  • What is IR35?

    Type:
    FAQs

  • HMRC revamps CEST tool ahead of private sector IR35 rules

    Date:
    26 November 2019
    Type:
    News

    HM Revenue and Customs has updated its Check Employment Status for Tax (CEST) tool ahead of the introduction of private sector IR35 rules next year. But concerns about its accuracy remain.

  • Podcast: IR35 reform

    Date:
    19 November 2019
    Type:
    Audio and video

    We discuss proposed reform of IR35 in the private sector that will have an impact on off-payroll working.

  • HMRC to reform CEST tool ahead of IR35 changes

    Date:
    23 October 2019
    Type:
    News

    HM Revenue and Customs has announced it will make changes to its Check Employment Status for Tax tool, which has been criticised by businesses and contractors alike for inaccuracy.

  • IR35: Time for the private sector to get its house in order?

    Date:
    17 October 2019
    Type:
    Commentary and analysis

    Recent decisions by major employers to bring all contractors onto payroll have ruffled feathers in the contractor community. Six months before IR35 legislation is extended to the private sector, do employers face a talent drain or can they still engage with a flexible, self-employed workforce without facing the wrath of HMRC? Jo Faragher investigates.

  • Date:
    17 July 2019
    Type:
    Legal guidance

    Despite a raft of problems concerning IR35 "off-payroll" rules in the public sector, HM Revenue & Customs last week confirmed that from 6 April 2020, the tax regulations extend to the private sector. Caroline Harwood explains how businesses need to prepare.

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HR and legal information and guidance relating to IR35.

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