IR35 (Off-Payroll) Changes 2020

IR35 Private Sector Update

Our team at Integro Accounting are staying on top of the latest news in regards to all things IR35. This page will contain regular updates as and when we get news on the suggested IR35 changes that could affect the public sector.

On 7th March 2019, our team attended the FreeAgent webinar which covered the latest news from HMRC on the proposed 2020 roll-out for the off-payroll working rules in the private sector.

The key points taken are:

The clauses that still affect the IR35 rules themselves will not change. Contractors will still need to show that they are not:

1. Under the control of the end client.
2. Contractors have free reign on sending a substitute to complete the contractor requirements/services.
3. Absence of mutuality of obligation (MOO) clause is applied from both parties.

The end client/company will be responsible for deeming the contract inside or outside of IR35.

The end client/company can not simply deem all contractors inside IR35 as a ‘safety net’. HMRC are allowing enough notice and care on the subject matter to be implemented in advance of the proposed 2020 roll out. This is because of negative feedback received when the public sector roll out for the off-payroll working rules were introduced in 2017.

July 1st 2019 Update – Industry bodies urge the British government to delay it’s plan to extend IR35 off-payroll working to the private sector.

The latest news on the much intended legislation is for the government to delay plans until April 2021 to allow recruiters and industry bodies alike to be better equipped for the change. Concerns are that without the correct amount of time to prepare, companies may take a ‘blanketed approach’ when deeming contractors inside or outside of IR35.

Feedback analysed by ContractorCalculator consists of 29 consultation responses from the likes of the Institute of Chartered Accountants in England and Wales (ICAEW), the Confederation of British Industry (CBI), the Recruitment and Employment Confederation (REC) and the Association of Independent Professionals and the Self Employed (IPSE).

Dave Chaplin, CEO and founder of ContractorCalculator, stated: “Our summary makes it clear that HMRC has a lot of work to do before it can seriously consider extending the Off-Payroll rules to the private sector. Many have urged HMRC to take stock, instead of ploughing ahead with its ill-conceived plans. At the very least, a further delay until April 2021 is needed to enable HMRC to attempt to fix the many flaws in its plans – it is time to delay, review and rethink.”

The IR35/Off-payroll changes are still subject to change. We have partnered with industry expert Qdos who offer insurance for IR35. Qdos review over 600 contracts for IR35 compliance a month and have defended over 1,500 cases, saving contractors an estimated £35million of tax. For more information, please click here: Business Insurance Qdos

September 2019

Following new developments, the team at Integro Accounting have developed a FREE IR35 jargon buster guide. Click here to download your easy to read guide which details more information about the IR35 private sector roll out, what to do next and how we can help.

We will ensure to keep you up to date with all things IR35.

February 2020

Reviews by HMRC have stated that all invoices raised and paid prior to the 6th April 2020 off payroll roll out into the private sector will not be impacted by any IR35 changes. Payments made for assignments on or after 6th April 2020 will have the new payment rules applied.

For example: An invoice raised in March 2020 is outside IR35, but paid 20th April. The contract falls inside IR35 from April 2020, however no tax changes made will be made as it was raised prior to the 6th April roll out.

March 2020

The House of Commons announced that due to the spread of the Covid-19 (coronavirus) the IR35 off payroll reform, into the private sector, will now be postponed until April 6th 2021.