IR35: Budget confirms changes coming 6 April 2020
The Chancellor, Rishi Sunak has just delivered his first budget and, in a blow to many who were hoping for a late reprieve, the Government has confirmed that IR35 changes which had long been expected are continuing next month.
“Review of changes to the off-payroll working rules (commonly known as IR35) – At Budget 2018 the government announced that it would reform the off-payroll working rules in the private and third sectors from April 2020. The government has recently concluded a review of the reform, and is making a number of changes to support its smooth and successful implementation. The government believes it is right to address the fundamental unfairness of the non-compliance with the existing rules, and the reform will therefore be legislated in Finance Bill 2020 and implemented on 6 April 2020, as previously announced.”
As a result, the changes will be coming into law on 6 April 2020.
What is IR35?
In the UK, a great number of organisations engage self-employed contractors to complete work on their behalf. IR35 is shorthand for the situation where there is an “intermediary”, often a limited service company, involved in a relationship between a self-employed contractor and an end user or client (“IR35 Contractors”).
IR35 exists to try and prevent a situation whereby IR35 Contractors are actually employees but are using this structure to pay less tax.
What is changing in April 2020?
At present, most, if not all, of the risk attached with the IR35 model sits with the Limited Company, However, from April 2020 and beyond, this focus shifts, often to the End User or Client. As a result, if your company engages IR35 Contractors you may be responsible for:
- Determining whether or not that independent contractor is genuinely self-employed;
- Liability for any unpaid taxes in the event that HMRC deem that your IR35 Contractor is in fact a disguised employee; and
- If they are not genuinely self-employed, bringing that IR35 Contractor onto your payroll.
As a result, it is imperative that all organisations who interact with IR35 Contractors are equipped to deal with these changes moving forward.
What is IR35 Verify and how can it help?
IR35: Verify is a suite of services designed to assist you in complying with your legal requirements in respect of IR35. IR35: Verify works by conducting a thorough review of your existing arrangements to identify areas of concern where there may be a risk an IR35 Contractor is a disguised employee.
Contact
Mark Hickson
Head of Business Development
onlineteaminbox@brownejacobson.com
+44 (0)370 270 6000
Related expertise
You may be interested in...
Legal Update
Employment Healthcare Briefing: December 2024
Legal Update
Employment Rights Bill: Will it cost more to outsource public services and back-office functions?
Legal Update
Navigating workplace sexual harassment laws during the festive season
Legal Update
Navigating the new 'Failure to Prevent Fraud' Offence: What organisations need to know
On-Demand
Managing safeguarding allegations against staff
Opinion
Revolutionising the Workforce: Impact of Get Britain Working White Paper
Legal Update
Supreme Court shines a light on collective agreements
Press Release
Browne Jacobson advises Celtic Freeport as it opens for business
In Person Event
Ascensus and O Shaped workshop: Ethics in the spotlight
Legal Update
What’s in a name: ESG principles and UK local authorities
Opinion
Balancing employer flexibility and employee rights
Legal Update
Right to work update: eVisas
Legal Update
How the Data (Use and Access) Bill will impact the public sector
Opinion
Empowering your workforce: Key tips on adjustments for new starters
On-Demand
Shaping a culture of respect and safety: Preventing sexual harassment in our schools
Legal Update
Top five takeaways for schools on the Employment Rights Bill
Legal Update
Building an inclusive workplace: Strategies for attracting and retaining disabled talent
On-Demand
How schools can grapple with new employment law to thrive in a new era
Press Release
Browne Jacobson advises The Jordon Group on transformative merger
Press Release
Browne Jacobson advises UK’s leading fire protection specialist on key acquisition
Press Release
Browne Jacobson advises IT solutions specialist on sale to Goldman Sachs-backed international digital transformation provider
Online Event
EdCon 2025
Legal Update
Breaking the glass ceiling: Empowering female leadership in the food and drink sector
Legal Update - Employment Rights Bill
What does the Employment Rights Bill mean for employment practices liability insurance?
Opinion - Employment Rights Bill
Beyond the Bill: Exploring the horizon of new employment rights and proposed measures
Legal Update - Employment Rights Bill
Labour’s employment law reforms: Employment Rights Bill unveiled
Legal Update
Expanding the role of school attendance mentors
Press Release
Browne Jacobson advises UK climbing operator on sale to Belgian investment firm
Legal Update
Organisational approaches to ESG and sustainability matters
Legal Update
What the UK Covid-19 Inquiry means for higher education providers
Opinion
New anticipatory duty to prevent sexual harassment at work: final EHRC guidance published
Opinion
Employment tribunal case shines light on mistaken customer communications
Press Release
Browne Jacobson launches new HR services offering in health and social care
Press Release
Browne Jacobson and CBI roundtable explores how to finance public infrastructure post-PFI
Opinion
Navigating the new norms of flexible working and reasonable adjustments
Legal Update
Hybrid working, the right to flexible working and how to make it work for public sector employers
Press Release
Comments on the publication of Universities UK’s (UUK) report
Press Release
An interview with HSBC’s ex-commercial manager
Opinion
HMRC score on employment status: Football referees may be employees
