IR35 rules here to stay after government U-turn
This article is taken from October's public matters newsletter. Click here to view more articles from this issue.
A few weeks ago we brought you news that following the Government’s mini-budget it was confirmed that the off-payroll working rules (known as “IR35”) put in place for public and private sector businesses from 2017 and 2021 would be scrapped from April 2023.
However, on 17 October 2022, the new Chancellor announced a major U-turn concerning most of the tax measures previously announced in the mini budget - including the plans to scrap the off-payroll working rules from April 2023.
IR35 rules are concerned with the taxation of individual contractors engaged by businesses via an intermediary such as a personal service company. Historically, the issue of determining whether the contractor was required to be taxed as an individual or as a company was a matter for the contractor. This was altered in 2017 and 2021 when the IR35 rules changed and the business engaging the contractor was required to determine the correct tax status of the engagement.
In light of the U-turn, businesses will therefore continue to be required to determine the correct tax status of the engagement (and pay the tax and NI where appropriate).
Businesses engaging contractors should continue to consider the application of IR35 and ensure they continue to keep the necessary records of their checks and the tax status determinations. In addition to this (and whilst different to tax status) consideration of employment status should remain a priority for businesses given the potential liability created to individuals where their employment status is wrongly determined.
Contact
James Tait
Partner
james.tait@brownejacobson.com
+44 (0)121 237 3999
Discover more
You may be interested in...
Opinion
Empowering your workforce: Key tips on adjustments for new starters
Press Release
Browne Jacobson and NHS Transformation Unit explore provider group models in new report
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
New High Court case on exclusion reconsiderations
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
Guide
New guidance for intervention in schools
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
Online Event
Managing safeguarding allegations against staff
Press Release
Browne Jacobson advises UK climbing operator on sale to Belgian investment firm
Legal Update - Maternity services
DISCERN study published: How to improve discussions with families when things go wrong in maternity care
Legal Update
Organisational approaches to ESG and sustainability matters
Legal Update
Balancing acts: Navigating the complex risks in adult social care provision
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
Employment Healthcare Briefing: October 2024
Legal Update
Attendance management checklist for schools
Legal Update
What does the Supreme Court decision in Tesco v USDAW mean for NHS employers?
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
Legal Update
Strike breakthrough: Junior doctors agree to pay deal, ending prolonged industrial action
Press Release
Browne Jacobson advises global digital transformation services provider on PE investment and acquisition of US and Hungary-based commerce consultancy
Legal Update
Supreme Court re-instates injunction in Tesco fire and re-hire case
Legal Update
A balancing act: Navigating between positive action and discrimination in the workplace
