Reforms to the IR35 rules on off-payroll working in the private sector come into force on 6 April 2021, after being delayed for a year due to the coronavirus crisis. The rules are aimed at reducing tax avoidance for contractors employed via personal service companies.
Under the new rules, the organisation engaging a contractor is responsible for determining the contractor’s employment status and assessing whether IR35 applies. If IR35 applies, the organisation that pays the individual’s fees is deemed to be their employer for tax and national insurance purposes.
Employers should review their contracts and put in place the necessary procedures to ensure compliance.