As you may already be aware, it’s less than 70 days until changes to IR35 come into effect.
At the moment, contractors who operate through their own personal service company (PSC) are responsible for ensuring they’re paying Income Tax and National Insurance. From 6 April 2021 however, this will be passed onto the companies who hire these professionals.
Off-payroll working rules will be adapted for:
- Medium and large non-public sector organisations who engage contractors who work through their own limited company or other intermediary
- Employment agencies who supply such contractors
If you haven’t already done so, now is the time to start making preparations.
Preparing for changes to IR35
Below is a list of some of the ways you can get your business ready:
- Check the employment status of your workforce so you know who is likely to be affected by the changes. HMRC’s CEST tool can help with this
- Talk to any contractors or agencies you engage with – they need to be aware that the way they pay tax may change from April. You can assist them by directing them to HMRC’s contractor factsheet and flowchart
- For any engagements extending beyond 6 April 2021, decide if they’re inside or outside the rules. Make sure you share your decision with your contractor/s and any agencies you work with
- Consider whether you or an agency will need to operate PAYE
- Set up a process you will follow should disagreements about employment status arise
- Always ensure you maintain an audit trail
- Head to the HMRC website where you can find help and support for everything related to off-payroll working
If you need help with the upcoming IR35 changes, please don’t hesitate to get in touch. As always, we’re more than happy to assist with any queries or concerns.
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