If you are a contractor or freelancer, then you will know about the IR35 'Off-Payroll' Rules. Some significant changes are coming up in April 2020, so it's essential to keep up to date with these. 

It is also essential that recruitment agencies and private sector companies are aware of the changes, especially if they use contractors and freelancers for specific projects.

What is IR35 – 'Off-Payroll' Rules?

IR35 applies when an individual (the "Contractor") provides services through an intermediary to another person or Company (the "Client"). The intermediary, in this case, can be another individual, a partnership, an unincorporated association or a company. Most contractors set up a personal services company (a "PSC") and use this as a vehicle for invoicing the Client.

Why are the IR35 Rules changing?

Many contractors use IR35 as a way of making their business as tax efficient as possible. If the Company employed them, they would pay more in tax and National Insurance Contributions. By making the changes, the HMRC will ensure that contractors pay a similar amount of tax and NICs as employees of the Company.

What's the next step?

Companies are urged to review their current workforce and identify anyone that is currently being paid via a personal services company (PSC). You need to check if the off-payroll rules apply. You can use the HMRC's tool – Check Employment Status for Tax Service.

If the contractors are deemed to be 'inside' IR35, the fee-payer (Client or Recruitment Agency) must deduct employees' NICs and income tax from the contractor's pay, as well as paying employers' NICs.

If you are unsure about the status of your workforce and want more advice on implementing the new IR35 rules in April 2020, then contact us by calling 01623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it..