Almost a year has passed since extending IR35 into the private sector was postponed due to Covid-19.
With no further delay expected to the 6 April 2021 start date, it’s important that you understand your responsibilities as a contractor so that you do not get caught out by the off-payroll tax rules.
So, what does this mean for you as a Sanctuary Personnel candidate and what can you do to prepare?
From 6 April 2021, the IR35 ‘off-payroll’ working rules will no longer just apply to those workers personally providing services to a public sector end-user through an intermediary (usually a personal service company ‘PSC’). They will also apply where the end-user is a medium or large sized private sector organisation.
Set by HMRC, the Intermediaries Legislation (IR35) rules assess whether a worker would be deemed to be an employee if (ignoring the PSC) they were providing their services directly under a hypothetical contract with the end-user.
It will be the obligation of the end-user (client) receiving the service to decide whether IR35 applies to the working arrangement (contract). In deciding whether a person’s contract work is ‘inside’ IR35 or not, several factors are used including the right to substitution, control, mutuality of obligation, and other aspects that indicate ‘employed’ rather than ‘self-employed’.
Crucially, the rules will apply, even where other parties sit between the worker’s PSC and end-user in the labour supply chain.
What to do?
Aside from the start date (6 April 2021 rather than 2020), there have been no changes to the upcoming extension of IR35 rules into the private sector.
If you are a private sector contractor and would like to refresh your knowledge of IR35 or have some questions over the upcoming legislation (that will take effect from 6 April 2021) – you can contact our senior accountant for advice.
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