IR35 Articles

HM Revenue and Customs (HMRC) has released more information about the rules governing off-payroll contractors in the public sector.

HMRC updated its guidance on the rules, which have been in effect since April.

The updated guidance clarifies some sticking points that have confused contractors for months.

Since 6 April 2017, responsibility for determining IR35 status has passed from public sector contractors, operating through an intermediary, to the public sector body engaging the contractor.

Although the fundamental rules are the same, the April change is seismic in terms of how the rules are applied. 

There will be a number of things changing this April, some of which will affect them negatively.

We assess the changes and suggest some tax-efficient ways for contractors to respond.

HMRC has launched a new tool designed to help contractors, and those that engage them, decide a worker’s IR35 status.

But with less than a month to go before a fundamental change in the way IR35 rules are applied, some experts have found cause for concern with the Employment Status Indicator tool.

A contractor’s IR35 status is all about whether the contract they are working on should be considered employed or self-employed for tax purposes. The Employment Status Service is supposed to give HMRC’s view of whether a contract is inside or outside IR35.

This will be of particular interest to limited company contractors working in the public sector because, from April, it will be the public sector organisations that decide on IR35 status instead of the individual. 

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