IR35 rules here to stay after government U-turn
This article is taken from October's public matters newsletter. Click here to view more articles from this issue.
A few weeks ago we brought you news that following the Government’s mini-budget it was confirmed that the off-payroll working rules (known as “IR35”) put in place for public and private sector businesses from 2017 and 2021 would be scrapped from April 2023.
However, on 17 October 2022, the new Chancellor announced a major U-turn concerning most of the tax measures previously announced in the mini budget - including the plans to scrap the off-payroll working rules from April 2023.
IR35 rules are concerned with the taxation of individual contractors engaged by businesses via an intermediary such as a personal service company. Historically, the issue of determining whether the contractor was required to be taxed as an individual or as a company was a matter for the contractor. This was altered in 2017 and 2021 when the IR35 rules changed and the business engaging the contractor was required to determine the correct tax status of the engagement.
In light of the U-turn, businesses will therefore continue to be required to determine the correct tax status of the engagement (and pay the tax and NI where appropriate).
Businesses engaging contractors should continue to consider the application of IR35 and ensure they continue to keep the necessary records of their checks and the tax status determinations. In addition to this (and whilst different to tax status) consideration of employment status should remain a priority for businesses given the potential liability created to individuals where their employment status is wrongly determined.
Contact
James Tait
Partner
james.tait@brownejacobson.com
+44 (0)121 237 3999
Discover more
You may be interested in...
Legal Update
Employment Healthcare Briefing - December 2023
Opinion
Autumn statement 2023 – key take outs for employers
Opinion
Collective bargaining rights
In Person Event
Mock Employment Tribunal: for NHS and independent health
Legal Update
Failure to prevent fraud: how can my organisation prepare?
Opinion
Agency cover and strike action
Published Article
Infrastructure and social value in public contracts – making it concrete
Opinion
Overcoming barriers: Building leadership resilience in MATs
Opinion
Updates in equality – An overview of new regulations
Opinion
Minimum Service Levels and reasonable steps – consultation response
Legal Update
Holiday entitlement and pay: Reforms ahead
Legal Update
A positive duty to prevent sexual harassment
Press Release
Browne Jacobson advises Care Fertility Group on acquisition of CRGW
Legal Update
The FPPT framework – New Guidance and what NHS organisations need to know
Opinion
Bonus clawback provisions: Clear and reasonable
Opinion
Third party intervention did not break the chain of causation in whistleblowing detriment claim
Opinion
Holiday pay claims: A series of deductions
Opinion
Monitoring workers – ICO guidance
Press Release
Browne Jacobson strengthens employment team with key partner hire
Legal Update
Greater predictability over terms for workers
Guide
Transforming EDI practices in UK insurance
Opinion
Minimum service levels and reasonable steps
Opinion
New framework to support flexible working in the NHS
Opinion
Modern slavery in the care sector – how employers can manage risks
Legal Update
MHPS disciplinary processes: Dr’s application for interim injunction refused
Legal Update
Defending equal pay claims: Equal pay for equal work?
Opinion
£600m funding unveiled to boost social care workforce
Opinion
Government response to Pregnancy Loss Review recommends actions for NHS employers
Legal Update - Maternity services
The NHS Long Term Workforce Plan 2023
Opinion
Right to request flexible working – changes ahead for employers
Legal Update
Employment Healthcare Briefing - July 2023
Opinion
Are teacher strikes coming to an end?
Opinion
Further consultants strike announced following government pay offer
Opinion
Watering down workplace harassment proposals
Opinion
Agency worker cover during strikes
Press Release
Law firm advises on MBO of insolvency and restructuring firm Bridgewood backed by DSW Capital
Legal Update
Glass ceilings and workplaces
Opinion
EU standstill provisions maintained allowing the NHS to retain and employ healthcare workers
Legal Update
School leaders survey – the results are in!
