Changes to off-payroll working rules give businesses “more time to prepare”

Posted on: 07/02/2020

The new off-payroll working rules in the private sector will only apply to payments made for services provided on or after 06 April 2020, it has been revealed.

Previously, the rules would have applied to any payments made on or after 06 April 2020, regardless of when the services were carried out.

The changes come after concerns were raised by businesses over what payments the rules apply to and when.

Under the new legislation, officially known as IR35, employers will be held responsible for determining a contractor’s employment status. The new rules will also make employers liable for any underpaid tax should they incorrectly determine a contractor’s employment status.

Commenting on the rules, HMRC said: “To increase compliance with the existing off-payroll working rules (often known as IR35), medium and large organisations in all sectors of the economy will become responsible for assessing the employment status of individuals who work for them through their own limited company.”

The new legislation, however, only applies to medium and large businesses who meet at least two of the following criteria:

  • The company has a turnover of £10.2 million or more
  • The company has a balance sheet total of £5.1 million or more
  • The company has 50 employees or more

To access the off-payroll working rules factsheet, click here.

For help and advice complying with the new off-payroll working rules, please get in touch with our expert team.