Autumn Budget – what you need to know about IR35

Yesterday the Autumn Budget provided clarity to private sector contractors on the issue of off-payroll (IR35) rules.

The Chancellor stated that the new rules will come into force in April 2020 and will apply to large organisations only. However, no details of which organisations will qualify for exemption have yet been released.

Plans to change off-payroll rules in the private sector followed the introduction in April last year of new rules for public sector contractors who worked through their own personal service companies (PSCs).

The new rules meant that responsibility for establishing IR35 status shifted from the worker and their PSC to their engager. As a consequence, the engaging organisation now has to deduct PAYE from the payment to the PSC and make the employer’s NIC on that payment.

The Government announced its plan to introduce these rules into the private sector and launched a formal consultation exercise earlier this year.  Now, the Budget has provided clarity, with the Chancellor Philip Hammond confirming that the new rules will be introduced, but not until April 2020.

“If you are a contractor in the private sector, or if your organisation engages workers through PSCs, you will now need to review your position. It’s important to understand how you will be affected so that you can mitigate any potential impacts.”

Paul McDonnell, Sales Director

The news received a mixed response from the FCSA which highlighted concerns about the ability of large businesses to prepare for the change, and the possibility that it could result in a proliferation of non-compliant tax avoidance schemes.

You can read more about the Government’s consultation on off-payroll working here.

If you have any queries about the new rules or IR35 in general, please get in touch with our expert team on 01244 684700.