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

Forgotten your password?

IR35: budget confirms changes coming 6 April 2020

11 March 2020

The Chancellor, Rishi Sunak has just delivered his first budget and, in a blow to many who were hoping for a late reprieve, the Government has confirmed that IR35 changes which had long been expected are continuing next month.

“Review of changes to the off-payroll working rules (commonly known as IR35) – At Budget 2018 the government announced that it would reform the off-payroll working rules in the private and third sectors from April 2020. The government has recently concluded a review of the reform, and is making a number of changes to support its smooth and successful implementation. The government believes it is right to address the fundamental unfairness of the non-compliance with the existing rules, and the reform will therefore be legislated in Finance Bill 2020 and implemented on 6 April 2020, as previously announced.”

As a result, the changes will be coming into law on 6 April 2020.

What is IR35?

In the UK, a great number of organisations engage self-employed contractors to complete work on their behalf. IR35 is shorthand for the situation where there is an “intermediary”, often a limited service company, involved in a relationship between a self-employed contractor and an end user or client (“IR35 Contractors”).

IR35 exists to try and prevent a situation whereby IR35 Contractors are actually employees but are using this structure to pay less tax.

What is changing in April 2020?

At present, most, if not all, of the risk attached with the IR35 model sits with the Limited Company, However, from April 2020 and beyond, this focus shifts, often to the End User or Client. As a result, if your company engages IR35 Contractors you may be responsible for: -

  • Determining whether or not that independent contractor is genuinely self-employed;
  • Liability for any unpaid taxes in the event that HMRC deem that your IR35 Contractor is in fact a disguised employee; and
  • If they are not genuinely self-employed, bringing that IR35 Contractor onto your payroll.

As a result, it is imperative that all organisations who interact with IR35 Contractors are equipped to deal with these changes moving forward.

What is IR35 Verify and how can it help?

IR35: Verify is a suite of services designed to assist you in complying with your legal requirements in respect of IR35. IR35: Verify works by conducting a thorough review of your existing arrangements to identify areas of concern where there may be a risk an IR35 Contractor is a disguised employee.

To learn more about IR35: Verify, including pricing information, please contact Ian Deakin on ian.deakin@brownejacobson.com

Focus on...

Brexit resources

REACH Registration post-Brexit

Although the UK’s departure from the EU means that the EU REACH regulation no longer applies, UK REACH has stepped in to fill the gap, and UK-based companies exporting to the EU are now facing two chemicals regulation frameworks to deal with when before there was just one. Is your company ready for the challenge?

View brexit resources

COP 26 - what is it and why is it important?

COP 26 is the global United Nations climate change Summit, which will take place in Scotland in November. It comes at a time when climate change, and how to reduce greenhouse gas emissions, is at the top of the political agenda.

View

Legal updates

Changes to flexible working in the NHS and "childcare disparity"

On 13 September 2021 the previously announced changes to section 33 of the NHS Terms and Conditions of Service Handbook come into effect, giving increased rights to request flexible working to all staff covered by those terms within England and Wales.

View

Legal updates

Covid-19 adjusted right to work update

Advice for employers carrying out right to work checks has been updated as a result for Covid-19, replacing 18 June 2021 guidance.

View

The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

Mailing list sign up

Select which mailings you would like to receive from us.

Sign up