Increases in company size thresholds will have a knock-on effect on off-payroll working rules (IR35), warns Neil Maslen CTA, senior manager at HW Fisher
Under off-payroll working rules, medium and large businesses engaging contractors must assess whether the engagement falls inside or outside IR35, and operate PAYE for those which are considered inside IR35.
The definition of a ‘medium or large’ entity changed from 6 April 2025, in practice this should mean less businesses are caught by the off-payroll obligations. Although this is unlikely to affect businesses for a while.
What is changing?
Prior to 5 April, if a corporate business meets any two of the following thresholds, it will fall into the realm of the off-payroll working regulations:
- turnover exceeding £10.2m;
- total assets of £5.1m;
- more than 50 employees.
For accounting periods beginning after 5 April 2025, the thresholds will be raised to:
