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Tag Archive

New rules for IR35 and off-payroll working from 6 April

After postponements in 2019 and 2020, the 6 April 2021 is the third date scheduled for the off-payroll working rules to be extended to the private sector. The purpose of the change is to increase compliance with tax rules known as IR35. This change has implications for:

  • medium and large private sector organisations using contractors and freelancers;
  • contractors and freelancers who provide their services through an intermediary, such as a personal services company; and
  • agencies supplying contractors who provide their services through an intermediary.
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It is time to refresh HR policies and practices for 2021

2020 was a tumultuous year with employers having to respond rapidly to the challenges of the pandemic and it doesn’t look like it is easing any time soon. Culturally the world has shifted too, with the Black Lives Matter movement bringing momentum to improving equality and diversity at work. The end of the Brexit transition period on 31 December 2020 means an end to free movement and has implications for UK employment law.

As we now enter a further lockdown this is a good time to review and refresh HR policies and practices after a fast-paced 2020 and to get ready for the challenges of the new year.

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The Spring Budget 2017: IR35 and Public Sector Contractors

Some, or most of you will recall that the government introduced IR35 in 2000 to stop ‘disguised employee’ i.e. self-employed individuals, who fundamentally share the characteristics of an employees, working under a limited company to benefit from the tax breaks. 

Whether IR35 achieved the aim that the government set remains debateable. However, in this spring’s budget the government took a step further and confirmed from 6 April 2017, in the public sector only, IR35 status will be determined by the client, not the contractor. 

If a client decides that IR35 applies, the contractor business will be taxed at source, through the Real Time Information (RTI) system, exactly as if it were an employee. While the tax position would be the same as that of an employee, unfortunately, the benefits won’t as the contractor will not be entitled to sick or holiday pay, nor will they have the right to claim unfair dismissal.

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