Preparing for off payroll working (IR35) in the private sector

By Tolley

The following Employment Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Preparing for off payroll working (IR35) in the private sector
  • Private sector clients
  • Intermediaries and fee payers

For the private sector, new rules were due to come into force on 6 April 2020 in relation to the engagement of off payroll workers. However, on 17 March 2020, the Chief Secretary to the Treasury, Stephen Barclay, confirmed that the Government is postponing the reforms to the off payroll working rules (IR35) from April 2020 to 6 April 2021. This will be done through an amendment to the Finance Bill and is in response to the ongoing spread of coronavirus (COVID-19) to help businesses and individuals. Mr Barclay was clear that this is a deferral, not a cancellation, and said that the Government remains committed to the reforms to ensure that people working like employees, but through their own limited company, pay broadly the same tax as individuals who are employed directly (see Hansard ). See the Off payroll (IR35) in the private sector ― overview guidance note for details of the rules and responsibilities of everyone in the supply chain. This guidance note addresses what the next steps are to prepare for 6 April 2020 (now delayed until April 2021). HMRC has published guidance on preparing for the rules on GOV.UK ; however, this is simplified significantly.

Private sector clients
Decide whether you are caught by the rules

Private sector clients will first need to assess whether they are caught by the rules. This means understanding whether they are considered to be medium or large businesses. This is tested based on whether a business is small. If it is not small,

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