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Friday, 12 July 2019

Released 11 July 2019 


The changes will apply to payments made on and after 6 April 2020.

You can see the draft legislation here and the government policy paper here.


Please note – the draft legislation is subject to an 8 week technical consultation until 5 September 2019. The outcome of this process may result in amendments to the draft legislation, the final legislation is expected around November 2019. 


The REC has written a brief summary of the draft legislation key changes but we will conduct a more detailed review into the legislation and compile advice for members, clients and contractors in due course. Please note, we will update the template contracts as soon as the final legislation is released towards the end of 2019. 

Summary of changes:


  • Clients who are classed as small companies will be exempt from the changes, therefore the existing private sector IR35 rules in will apply to them i.e. intermediaries make their own status decisions and deductions. 
  • The small company will not be required to tell the agency that they are exempt. 
  • Clients who are not exempt (i.e. public authorities, medium and large businesses) will be required to pass their “status determination statement” and the reasons for their decision to both the party they contract with (i.e. Agency 1) and the worker.
  • There will be a client led disagreement process – clients will have 45 days to respond to questions about their status decision.
  • Fee-payers will not be required to make deductions for pensions contributions. 
  • HMRC are yet to release the updated Check Employment Status for Tax (CEST) tool.


  • the client will have fee-payer responsibilities, until such a time that they pass on a status determination to the worker and the party they contract with.
  • a party is liable if it fails to comply with its statutory obligations e.g. pass the status determination statement down the supply chain.
  • The client will be liable for tax and National Insurance Contributions where it fails to take reasonable care in its status determination statement
  • Agency 1 will be liable where HMRC cannot recover monies due from the fee-payer even where Agency 1 has complied with its obligations and even if Agency 2 has not. 
  • The client will be liable if HMRC cannot recover monies from Agency 1



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