A sense of panic and alarm spread rapidly through the wider contracting community when HMRC sent IR35 letters to more than a thousand GlaxoSmithKline (GSK) freelancers and contractors last week. But this is just a ‘taste of things to come’ when IR35 changes are extended to the private sector in April 2020, according to a contractor interest group.
April 2020 Articles
HMRC has launched a fresh consultation on changes to off-payroll Intermediaries Legislation (IR35), due to take effect in the private sector from April 2020.
The changes would see reforms introduced in the public sector in 2017 extended to the private sector.
The change will affect contractors that operate through an intermediary like a limited company or personal service company (PSC).
Instead of judging their own IR35 status, the private sector organisation that engages the contract will make this decision. It could mean that more contractors are deemed ‘inside IR35’ and liable to pay income tax and National Insurance contributions.
Large and medium sized private sector organisations have just over a year left to prepare for important changes to IR35 legislation.
When similar changes were introduced in the public sector in April 2017, many organisations were woefully underprepared. In the most serious cases, public sector organisations made costly errors and saw major projects delayed.
Getting ready for April 2020 requires effective leadership and co-operation across departments and business areas.
In this blog post, we will provide a brief introduction to the changes before detailing what different teams can do to prepare.