Off payroll working in the private sector (IR35)

31 July 2019

The government announced in Budget 2018 that from 6 April 2020 it will extend to certain medium-sized and large private sector businesses the changes which it made from April 2017 to the off-payroll working rules (IR35) to those working for public sector bodies. Under the new rules, the private sector employer will be responsible for determining whether IR35 applies and for paying tax and NICs, in some circumstances. Relevant legislative provisions will be included in the Finance Bill 2020. Draft clauses for this Bill were published on 11 July 2019, together with explanatory notes, tax information and impact notes, responses to consultations and other supporting documents. In November 2019, HMRC updated its Check Employment Status for Tax (CEST) tool. In January 20202, it published two draft Regulations that explain how it will recover unpaid income tax and NICs from employers. In February 2020 the government updated its Employment Status Manual (still in draft), which gives guidance on how the new rules will apply and announced that the changes will only apply to payments made for services provided on or after 6 April 2020.