Changes to the operation of the off-payroll working rules will only apply to payments made for services provided on or after April 6 2020, HMRC has announced.
The formal publication of a review into the implementation of changes to the off-payroll working rules is due to conclude in February.
HMRC said a common issue raised over the course of the review has been businesses’ concerns over what payments the rules apply to and from when. The government has listened and taken action early to give businesses certainty and more time to prepare to ensure the smooth and successful implementation of the reforms.
The rules will now apply only to payments made for services provided on or after April 6 2020. Previously, the rules would have applied to any payments made on or after April 6 2020, regardless of when the services were carried out. It means organisations will only need to determine whether the rules apply for contracts they plan to continue beyond April 6 2020, supporting businesses as they prepare.
Stay up-to-date with IR35 changes and guidance on how to prepare by attending a free London breakfast seminar, hosted by Reward Strategy and Crowe UK, on February 26.
Register to book a place at the seminar by emailing Jamie Thomas at: firstname.lastname@example.org
The off-payroll working rules have been in place since 2000. They are designed to make sure that an individual who works like an employee, but through their own limited company, pays broadly the same income tax and National Insurance contributions as those who are employed directly.
The government is extending the 2017 reform of the operation of the rules in the public sector to all medium and large organisations in April 2020. This will shift responsibility for operating the rules to the organisation that engages the worker. This is how employment status for tax is decided for the vast majority of people, who do not work through their own company.
HMRC will be communicating the changes to businesses via updated guidance and will continue to deliver education and support products to aid understanding.