Private Sector IR35? What you need to know now
Last week’s announcement regarding the launch of a consultation on off-payroll rules within the Private Sector has reopened the IR35 can of worms for clients, agencies and contractors alike.
Ever since the Autumn Budget last year, where the first warnings about a consultation were made, we were expecting this consultation to drop at some point over this summer. We hadn’t been clear on when it would be launched until Friday’s announcement.
What we know
- The consultation will run until 10th August this year.
- It is essentially a discussion paper – it proposes changes to the IR35 rules for the Private Sector (similar to those we saw in the Public Sector last year) but it also talks about a desire to learn from the April 2017 legislation changes, and does also ask for alternative options.
- If the rules are changed in the same way as for the Private Sector in April 2017, it will mean that end clients will need to make a decision as to whether all workers are inside or outside of IR35. Agencies will be responsible for applying these decisions, and deducting tax and NI at source if appropriate.
- The Government estimates that one third of workers currently operating outside of IR35 should actually be caught by the legislation.
- The Government thinks that the way that the Public Sector rules were changed last year has been successful, and has increased tax and NIC collected.
We know that, for both our contractors and clients, this consultation will raise lots of questions, but we are, as always, committed to working with both our contractors and our clients to navigate whatever changes the coming months may bring.
We’re also updating our contractors and candidates on what the consultation means – please contact our Contractor Care team with any immediate questions.
It's still early days, but we’re on hand to offer advice and guidance, and we’ll keep you updated!