The rules for IR35 off-payroll working will be overhauled from 6 April moving liability for tax and NICs to employers when hiring the majority of contractors. Nick Duffin, employment tax director at BDO, explains
The government plans to introduce new legislation from 6 April 2021 to help tackle the perceived abuse of tax and national insurance contributions (NIC) relating to off-payroll labour in the private sector (extending the rules in place for the public sector since April 2017).
Commonly referred to as the IR35 reforms, the changes will affect medium and large private sector businesses that engage workers operating through an intermediary. An intermediary is usually a worker’s personal service company (PSC), but could also be a partnership, a limited liability partnership (LLP), a managed service company or even an individual.
The rules are designed to ensure that where the individual works like an employee, but provides services through their PSC, they broadly pay the same tax and NIC as they would if they were a direct employee.
