Exactly a year later than planned, changes to the off-payroll rules – known as IR35 – will take effect in the private sector next month. The emergence of COVID-19 put paid to the changes affecting large and medium-sized private-sector organisations this time last year, but now it’s for real.
They were originally introduced back in 2000 to ensure that someone working like an employee, but through a company, pays similar levels of tax to other equivalent employees.
Non-compliance was forecast to cost the Treasury around £1.3 billion by 2023/24 if not tackled, prompting the Government to reform the rules starting with the public sector from April 2017.
This shifted the responsibility for determining employment status from an individual contractor to the organisation engaging them, with the aim of increasing compliance.
Now it’s the private sector’s turn.(more…)