IR35 – What it means for Interims
The Off-Payroll Rules/IR35 is not new tax legislation. Rules have been in place since 2000. However, changes to these rules were implemented in the Public Sector in 2017 and are due to be rolled out to the Private Sector from 6th April 2020.
The original rules sought to prevent contracting from being used as a vehicle for tax avoidance by those whose role would otherwise be a normal employment role at the client organisation. For most of its history, the legislation has allowed the Personal Service Company (PSC) or umbrella company of the contractor to determine his or her IR35 status and pay the required taxes to HMRC.
The incoming changes aim to tighten up the system around IR35, broadly by moving the responsibility for determining a contractor’s IR35 status to the end-client, and moving responsibility for the payment of any resulting HMRC taxes to the organisation paying the PSC.
2020 IR35 Changes – what it means for interims: https://www.practicus.com/wordpress/wp-content/uploads/2020/02/IR35-Brochure_interims-V8.pdf
How can Practicus help?
The government’s roll out of changes to the public sector in 2017 were widely described as shambolic. The draft legislation created more questions than answers when it came out in November 2016. HMRC’s CEST tool to aid IR35 determinations and the final legislation both came out less than a month before go-live on 6th April. This left no time at all for the market to really understand the impending legislation and adjust.
The good news for the private sector is:
Clarity and time – the private sector roll out has been communicated much better and well in advance, giving you time to understand and plan.
Over two and a half years of learning – Practicus has made hundreds of public sector placements since the changes, working with our clients on IR35 aspects on every one of them.
Case law – there have been a number of well documented tribunals so clients can incorporate case law into their decision making when reaching an SDS.
Less fake news – information from HMRC and the government is more forthcoming and there is not the same vacuum of misinformation and scare stories.