Under the off-payroll rules, from April 2020, private sector clients are responsible for determining a contractor’s IR35 status. The decision must be contained within a Status Determination Statement (SDS), alongside the client’s reasoning.
The Intermediaries Legislation was introduced in 2000 to tackle 'disguised employment', where an individual uses a limited company to carry out professional services, but works in a manner more like an 'employee'. Your take home pay will be significantly lower if your contracts fall within its scope.
Private sector IR35 changes from April 2020
So-called 'off payroll' changes to the IR35 rules were made to public sector organisations from April 2017, and will also hit private sector businesses from April 2020, following an announcement in Budget 2018. These new rules mean that clients (not contractors themselves) will be responsible for determining the employment status of contractors.
A consultation on how the private sector changes will be rolled out was published on 5th March 2019 - read our summary here.
- April 2020 Private sector IR35 reform - what happens now?
- What clients can do to prepare in advance of April 2020.
- What contractors can do to mitigate against the IR35 changes
- IR35 off-payroll changes - our essential FAQs
Get started with our IR35 guides
- Start off with our overview of IR35 for a concise guide to the legislation.
- Expert FAQ - Are you 'inside' or 'outside' IR35?
- Try our IR35 tax calculator to find out the financial cost if you are caught.
- Why you should consider taking out IR35 insurance cover.
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The IR35 ‘off-payroll’ rules will be extended to the private sector from April 2020 onwards, directly affecting a large number of contractors. What exactly does this mean, and what should contractors and clients do to comply with the new legislation?
The forthcoming off-payroll rules in the private sector have led to much discussion about the use of consultancies as a potential workaround.
The Intermediaries Legislation (aka IR35) was first mentioned in a 1999 Inland Revenue press release. Here we look at the key events which have taken place over the past 15 years, and the status of IR35 in 2014.
With the private sector off-payroll changes set to go ahead in April 2020, some ‘outside IR35’ contractors may be forced to work ‘inside IR35’ if their clients are reluctant to take on the potential risks of making incorrect employment status decisions – at least for the time being.
The Treasury has announced a review into the ‘off payroll’ (IR35) rules, seemingly aimed at making the private sector rollout as smooth as possible, rather than as a precursor to making much-needed changes to the underlying legislation.
The April 2020 off-payroll changes to the private sector represent a massive challenge to the contracting industry. Here we have included some of the most common FAQs we’ve been asked about the IR35 reforms.
For a relatively small outlay, a professional contract review service will analyse your contracts to ensure that you comply with IR35 – both in terms of your contract wording, but also the ‘working practices’ you undertake at your client site.
To ensure that any contracts you undertake are not caught by IR35, you need to be able to demonstrate that you are not a disguised employee, but truly working in the manner of a small business owner. In other words, can you show that you are ‘in business on your own account’?
A number of high profile clients will stop engaging limited company contractors in 2020 due to the private sector off-payroll changes. What should you do if you are affected? We ask a well-known IR35 expert.