The new IR35 Rules ate coming into force from the 6th April 2021, and there are still many people that are not aware of how this will affect them. These changes were initially due to come into force in April 2020 however were postponed due to the pandemic.
How how to prepare for changes to the off-payroll working rules if you engage contractors working through their own limited company.
What will change:
- rules for engaging individuals through personal service companies or other intermediaries are changing
- responsibility for working out if the off-payroll working rules (IR35) apply will move to the organisation receiving an individual’s services
You should make sure you understand:
- the impact of the changes on your organisation
- actions you might need to take before the changes come in
You need to look at your current workforce, this includes anyone that is employed through any agencies. Once you have done this, you need to identify the individuals that are supplying their services through their own limited company, moving forward it would be ideal to put a process in place to identify this individual at the engagement of work.
Speak with all of the individuals and the agencies that you work with, click here to download the government’s factsheet to help your contractors understand how this may affect them.
Understanding the off-payroll working arrangements apply can be confusing, click here to check the employment status for tax (CEST). Once you have determined if this rule applies you will need to speak with your contractors and any agencies that you work with, you can use the Status Determination Statment (SDS) to tell them.
If you operate PAYE, put in place processes to make sure the correct Income Tax and National Insurance contributions (NICs) are deducted for engagements inside the rules from 6 April 2021
We have provided some useful links that you can use through this. If you would like to discuss this further please do get in touch.
- Social media messages – off-payroll working rules (IR35)