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IR35 impact to private individuals

Off-payroll working for individuals and personal service companies

The Government introduced new off-payroll working rules (commonly known as IR35) from 6 April 2021.

The change was estimated to impact 170,000 individuals who supplied their services through an intermediary, such as a personal service company (PSC), and who would be deemed employed if engaged directly.

How has this change impacted the supplier of these services in the private sector?

The reform has meant that the right to decide whether the off-payroll legislation applies to an engagement has been removed from the contractor and it rests with the end user, where the end user is a medium or large business that has a UK connection.

Where this is the case the end user must issue to the contractor a Status Determination Statement confirming their status decision and their reasons for that decision.

The end user of the services will have a status disagreement process and be required to respond to representations made by off-payroll workers within 45 days of receipt.

The end user will also be obliged to confirm, where requested, whether or not they qualify as a small business for a particular tax year.

What should individuals be doing?

If you are providing your services through an intermediary, such as a PSC, you need to understand whether your engagement is likely to fall with the rules.

Begin by asking a few questions:

How can RSM help?

Our specialists have a detailed knowledge of the rules and practical experience of implementing changes.

We have a multi-disciplinary team of experts who can provide advice and help, including:

For further information contact Gary Heynes.

authors:gary-heynes