With new regulations coming into place in April 2021, it’s really important you establish whether or not you need to take action in advance of this date.
Off-work payroll working rules, or IR35 as it is better known, centres around “off-payroll” workers and who is responsible for paying income tax and national insurance for them. The rules around this were introduced to make sure that those working in a business as though they an employee pay broadly the same employment taxes as actual employees. The rules will apply to any person or organisation working in a business which is not categorised as a small business for IR35 purposes.
Currently the responsibility sits with those carrying out work to determine whether they are in employment or not with a business they provide services to. This would be determined by things such as whether a substitute can be sent to deliver the work, who provides equipment to be used and whether those carrying out the work are obliged to accept it.
From April 2021, responsibility will shift to the employer to determine whether the work being done falls in or out of IR35 rules, if it falls within IR35 the employer becomes responsible for income tax and National Insurance contributions.
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