IR35 and workers who provide their services through companies etc
Wednesday, 17 July 2019
Whilst much noise has, and continues to be made about the proposed changes to IR35, which will take effect in relation to services provided to medium and large businesses in the private sector from April 2020 (draft legislation was issued last week), it largely falls on deaf ears within government.
That’s perhaps not unsurprising given the miserable track record that IR35 has had to date as an anti-avoidance measure and the fact that, like it or not, these revisions, already tested on the public sector, provide a fairly easy way of generating some much needed tax revenue from the provisions.
Essentially all that’s happening here, is a shift of the burden for determining whether the rules apply from the contractor to the end client, getting them to make some tricky decisions about employment status and ensuring that they (or other fee payer, if they don’t engage directly with their contractor’s company) can become liable for any under-deduction of PAYE and NIC, should compliance failures arise.
It’s a sort of fix if you’re HMRC and generating tax revenue is the primary concern but one that imposes additional cost and disruption on contractors and end users alike. In the public sector this has already led to some inappropriate demands for tax, and leaves the underlying issues surrounding working practices still to be resolved.
Overall it’s not a great result if you’re impacted, but then changes in tax policy often aren’t!
If you think you’re affected, either as a medium or large business, or as a contractor, get in touch and we’ll help you steer the best course.
For more information on how we can help with employment tax, please speak to me or to your usual MHA Larking Gowen contact.
Call 0330 024 0888 or email firstname.lastname@example.org