Following a review of its plans in January 2020, HM Revenue and Customs (HMRC) has confirmed that changes to off-payroll working rules known as IR35 in the private sector will go ahead.

The changes to the off-payroll rules were due to come into effect on 6 April 2020. This has now been delayed until April 2021 because of the spread of the coronavirus (COVID-19) pandemic. The delay is to help businesses and individuals deal with the economic impact of COVID-19.

The review also led to a number of alterations to help organisations and contractors prepare for the changes. These include:

  • not penalising on anyone with inaccuracies relating to off-payroll working rules during the first year of the roll-out
  • HMRC won’t use any information submitted as a result of the changes to launch new investigations into Personal Services Companies for tax years before the roll-out (unless there’s reason to suspect fraud or criminal behaviour)
  • IR35 changes will now only apply to work carried out on or after the roll-out
  • clients will be legally obligated to supply information about their size from agencies or workers – this addresses the fact that IR3 is due to affect mainly medium and large organisations (categorised as having at least 50 employees).

We covered the original IR35 changes in the January 2020 edition of Managing for Success.