The off-payroll (IR35) rules are now confirmed, and the changes will be coming into place in April 2020. These are a few things you need to take into account if you are affected by these changes.
The IR35 off-payroll rules apply to:
- A contractor who works through an intermediary, e.g. your own limited company, i.e. personal service company.
- You provide services to public sector organisations or medium or large-sized private sector organisations.
From 6 April 2020, the company or organisation that uses the services of a contractor is responsible for deciding the employment status. In the past contractors have been responsible for doing this themselves. This has caused a lot of inconsistency in the sector.
The changes to IR35 off-payroll rules will affect how you pay your tax and National Contributions (NI). There are two options here:
- If the organisation that hires you decides that you are employed for tax purposes, then they will have to pay the tax and NI contributions on your behalf.
- If they decide that you are self-employed for tax purposes, then you are responsible for paying your tax and NI contributions.
If you would like further information, then you can look at the following guides or speak to your accountant.
- Guidance: April 2020 changes to the off-payroll working for intermediaries.
- Check employment status for tax.
If you were not applying the off-payroll rules correctly before this change in April 2020, you might find that you need to pay more or less initially to get the payments adjusted. If you have any queries, please do contact us.
You can call 01623 490 120 or email