| UPDATED: 08:02, Tue, Mar 16, 2021
Link copied Make the most of your money by signing up to our newsletter for FREE now
SUBSCRIBE Invalid email
When you subscribe we will use the information you provide to send you these newsletters. Sometimes they ll include recommendations for other related newsletters or services we offer. Our Privacy Notice explains more about how we use your data, and your rights. You can unsubscribe at any time.
IR35 rules have always applied to the public sector since 2017, but they have yet to be implicated within the private sector. These changes, however, are not retrospective. IR35 legislation was initially brought into the UK as a means to tackle tax evasion among contractors. The intention of the law is to ensure individuals who are working like employees but who operate via an intermediary, such as a Personal Service Company (PSC) or third party contracting firm, pay broadly the same tax and National Insurance (NI) contributions as an employee
The IR35, thankfully, won’t apply to all businesses in the UK.
Small businesses are currently exempt from the changes alongside sole traders and PAYE agency workers.
Medium and large-sized businesses will, however, be impacted by the new legislation, especially if they are a firm who regularly engages with self-employed contractors operating under a Personal Service Company.
A range of contractors will likely be affected, including builders, IT technicians and engineers, with some experts warning this could deter businesses from taking on self-employed workers.
RI35 changes: The changes will impact medium and large sized businesses (Image: Getty)
RI35: The main points of the 2021 Budget (Image: Daily Express)
| UPDATED: 07:53, Fri, Mar 5, 2021
Link copied Make the most of your money by signing up to our newsletter for FREE now
SUBSCRIBE Invalid email
When you subscribe we will use the information you provide to send you these newsletters. Sometimes they ll include recommendations for other related newsletters or services we offer. Our Privacy Notice explains more about how we use your data, and your rights. You can unsubscribe at any time.
IR35 legislation is designed to assess whether a contractor is a genuine contractor rather than a ‘disguised’ employee, for the purposes of paying tax. Contractors who work through a limited company enjoy a level of tax efficiency. While they don’t normally get benefits employees enjoy such as holiday and sick pay, they have flexibility and greater control over their work. Some contractors and their clients try to take advantage of the tax efficiency by working as a self-employed person when for all intents and purposes they are actually
HMRC announced recently that IR35 changes will be coming into effect from April 2021 following a long period of industry push back. The coming regulatory changes will have an impact on businesses, the self-employed and workers of all stripes and as such, key guidance has been issued.