0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

IR35 changes - six months and counting...

27 August 2019

In his 2018 Autumn Budget, the then Chancellor, Phillip Hammond, announced a significant change to the way liability for IR35 breaches will be dealt with for private sector companies from April 2020.

IR35 applies when a self-employed individual contracts with a client via a limited company. The client pays the limited company and in turn the limited company pays the individual. One of the benefits of this is that it typically attracts less tax. HMRC is therefore keen to make sure people using IR35 are genuinely self-employed and are not “disguised employees” using the system to reduce their tax burden.

With effect from April 2020, mirroring a change that has already been implemented into the public sector, it will be the responsibility of the end user to determine. In reality this means carrying out an assessment as to whether a contractor you are working with is genuinely self-employed.

That change is coming up quickly on the horizon…

We’re now just 6 months away from that change coming into force and, if you’ve not taken steps already, now is the time to review your existing arrangements with any contractors you work with.

It is important to audit your use of contractors generally, whether they operate via a limited company or not. This is not just a question of looking at what the contract says. This is important; but the “day to day reality” of the relationship is the most important consideration.


Next steps

IR35: Verify - find out how we can help >

related opinions

Can an application to postpone a hearing be refused?

This case highlights the importance of Claimants obtaining their own medical evidence in such matters especially when it is pivotal to their claim.

View blog

Employer obliged to pay settlement despite employees confidentiality breach

In Duchy Farm Kennels Ltd v Steels the employer was found not to have been relieved of its obligation to pay a settlement sum, despite the former employee having breached the confidentiality clause contained in the settlement agreement.

View blog

Furlough scheme extended to October

The Chancellor announced on Tuesday 12th May 2020 that the Coronavirus Job Retention Scheme (CJRS) is to be extended to the end of October.

View blog

Furlough and insolvency – are employees protected?

As more retailers and restauranteurs fall victim to insolvency, the Court of Appeal has confirmed that the contracts of employment of employees furloughed before a company is placed into administration will be treated as having been adopted by its administrators, therefore entitling the employees to “super-priority” status over other creditors.

View blog

mailing list sign up



Select which mailings you would like to receive from us.

Sign up