Are you ready for the new IR35 rules (extension of the off payroll rules into the private sector)?
On 6 April 2020 the IR35 rules in the private sector will change. REC’s work over the coming months will focus on helping members prepare for implementation, through a schedule of interactive seminars around the country.
You’ll walk away with a clear practical understanding on what you need to do to prepare your business, staff and clients ahead of the IR35 rules being implemented into the private sector.
IR35 - what you need to know
- The Intermediaries legislation, also known as IR35, came into force in April 2000. The IR35 rules determine how an individual working through an intermediary (including personal service companies or other companies or partnerships) should be treated for tax purposes. In 2017 IR35 reforms were introduced in the public sector and liability for determining IR35 status moved from the contractor to the party paying the worker- which in most circumstances would be the recruitment agency – these are known as the ‘off-payroll’ rules. The government later consulted on how to improve compliance with IR35 in the private sector - the REC responded to this consultation. In the Autumn Budget 2018 the Chancellor announced that he would extend the off-payroll rules into the private sector but would delay this extension until 2020.
Further details on the background and application of IR35 can be found in our Legal Guide.
How does IR35 affect recruitment agencies?
- What rules apply? agencies must know what sort of intermediary an individual is working through (if they are not payrolled directly by the agency). They must also know (at the moment) whether their client is a public authority or not, and therefore which IR35 rules apply. They must do the appropriate due diligence on the intermediary and use appropriate contracts.
- Extension of the off payroll rules: on 5 March 2019 the Government published its consultation into the extension of the off-payroll rules into the private sector. The consultation confirms that end users which are small companies will be exempt from the rule changes. It also proposes some changes regarding liability along the supply chain and how the IR35 status decision, which is made by the end user client, should pass through the supply chain. See our IR35 factsheet which explains the changes.
- Tax avoidance schemes identified by HMRC: REC reminds its members to beware schemes promising to reduce contractors’ tax and NICs and which HMRC considers do not work. These include paying contractors via loan, annuity and loyalty points for advertising the contractor’s services on a jobs board. HMRC have issued a number of Spotlights to warn contractors against using these schemes. When engaging with any intermediary, members should fully understand the arrangements used to pay those contractors – HMRC has issued guidance on how to identify tax avoidance schemes.
REC and IRP Members: £99+VAT.
REC and IRP Members, click the 'Book Now' button above to book and pay for your place online.
If you're a non-member of the REC, please call 0207 009 2100 or email firstname.lastname@example.org to book your place. By becoming an REC member, you can attend these events at member-exclusive rates and have unlimited access to IR35 related resources, webinars and our in-house legal helpline.