March is almost over and we’re all welcoming the warmer weather and longer days that come along with the start of spring.

In the theme of new beginnings, of course, April brings with it the start of a new tax year and, this time around, there are some rules you might need to pay attention to!

New rules can be confusing though. That’s why we’ve summarised the changes you need to know in our handy dandy Frequently Asked Questions.

What is changing?

The rules surrounding off-payroll working for clients and workers/contractors – known as IR35.

It means that anyone working for an organisation and being paid through an intermediary, will be making National Insurance contributions, and paying Income Tax the same as they would if they were a PAYE employee of the company directly.

 

How do I know if the rules apply to me?

If you provide your services through an intermediary such as your own Limited Company, partnership, personal service company, or another individual, these rules will apply to you.

It’s the client (the organisation in receipt of the services) that is responsible for determining whether or not the off-payroll working rules apply.

You can check online whether the rules apply to you by clicking here.

 

What will happen when the changes come into force?

If the rules apply, Income Tax and employee National Insurance contributions must be deducted from fees and paid to HMRC. In addition, employer National Insurance contributions and Apprenticeship Levy, if applicable, must also be paid to HMRC.

Why is it changing?

The Government want to clamp down on people setting up Limited Companies with themselves as the sole employee. Doing it this way meant those people were getting a discount on their National Insurance and Income Tax contributions.

 

When is the change happening?

From the 6th of April this year.

 

Why April 2021? Wasn’t this going to change earlier?

The eagle-eyed among you might have noticed the name of the legislation cropping up a few times over the past few years.

The IR35 Reforms were first announced back in 2018, when the Government expressed an interest in extending the rules to cover the Private sector. They’d hoped, back then, for the changes to begin by April of 2019.

However, the Government changed their minds when they realised how ambitious of a timescale that turned out to be and pushed back the date to April of the following year.

It just wasn’t to be, though, and, like so many things last year, it was postponed one more time until 6th April 2021 due to the impact of the COVID-19 pandemic – just twenty days before the reform was due to come into effect.

With less than two weeks to go until the updated proposed change to the rules, it looks like things will go ahead as scheduled on the 6th.

Still have questions about the changes to the rules?

Our driving industry specialist Recruitment Consultants are fully clued up when it comes to the changes and are always just a phone call or email away if you need help!

Get in touch with them by clicking here.

Get in touch

Click to connect with the person who can help you best.