3 March 2020 | Podcasts | Article by Sali Gwen Owens

HJ Talks About Charities: IR35 - Organisations need to be ready for the April change to off-payroll workers

Laptop on desk with papers | Hugh James

 

IR35 was due to be rolled out in the private sector from 6 April 2020 and was set to have a significant impact on businesses. On 18 March 2020, the government confirmed they would postpone the controversial reforms to the tax rules until April 2021 in an effort to alleviate pressure on businesses and individuals amid the Covid-19 crisis.

Rarely has a piece of legislation caused such a backlash from the business and contractor community as IR35 (Off-payroll Working Rules), an anti-tax avoidance rule that applies to all contractors and freelancers who do not fall under HM Revenue & Customs’ definition of being self-employed. From April 2021, every medium and large private sector business in the UK will become responsible for setting the tax status – or IR35 – of any contract worker they use, as is already the case in the public sector. The test for employment status has always been a complex area and this change will oblige organisations to consider all their contracts in a new light to avoid being liable for hefty tax bills.

Recorded prior to the Covid-19 outbreak, this podcast sees Sali Owens, Solicitor in our Employment and HR Services team talk to Emma Poole about how the changes will affect large and medium-sized businesses, and what organisations should be doing to prepare for the reforms. Confirmation that these reforms will now be delayed may be considered a welcome reprieve but the government message was clear; this is a postponement only and not a cancellation and the rules themselves remain unchanged.

 

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