We recently blogged about the upcoming April 2020 rollout of the changes to IR35 rules for the private sector. However, last month the government announced that they are now reviewing these changes, let’s take a look at the latest developments.
What is the April 2020 IR35 rollout?
IR35 rules were first introduced in 2000 to tackle tax avoidance by individuals operating as employees but being paid through their own personal service company.
In April 2017, IR35 was reformed for the public sector, making it the responsibility of the hirer rather than the contractor to deem whether the contractor fell inside or outside of the IR35 rules. The April 2020 rollout will introduce the same rules for the private sector.
What issues are the government addressing?
The review into April’s IR35 rollout has come in response to concerns from businesses and contractors about how the changes will be implemented smoothly.
Concerns being addressed include:
- Whether businesses or contractors require any additional support with the rollout.
- How to ensure that contractors outside of IR35 are not impacted.
What will the review involve?
During the review the government will hold meetings with businesses and contractors that would be affected by the reform to gain a clearer understanding of their concerns and how they can be better supported.
The online Check Employment Status for Tax tool will also be reviewed and improvements made to it.
The review is expected to be complete by mid-February.
Separate to the review, HMRC are also offering help and support with preparing for the April rollout to those that will be affected.
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It was announced only last week on 7th February that the off-payroll working rules will only apply to services delivered on or after 6th April 2020, this gives businesses certainty and more time to prepare for the new rules.
For help or advice with IR35, speak to one of our experts here at Langricks by giving us a call on 01625 697 940 / 01484 690 730.