New Off-Payroll Rules Extension

April 07th 2020

The IR35 rules have proved to be very unpopular, especially as their complex nature can be vexing on Employers.  So it is good news that the HMRC announced on the 7 February 2020 an extension to these off-payroll rules.

Previously, the rules would have applied to any payments made on or after 6 April 2020 regardless of when the services were carried out.  Obviously this has put enormous pressure for all final invoices to be submitted before the end of February 2020 in order that payments are made before the start of the new tax year.  This extension will now mean that the rules will only apply for contracts that continue after 6 April 2020.

From 6 April 2020 the responsibility will be shifted from the contractor to the end-client with regards to determining the classification of an employee and the IR35 status of a contract, this will create a system whereby it is probable that some employers who are over cautious might incorrectly classify an employee, and so a large number of contracts are expected to end prior to this date.  

The ‘end-client’ only applies to medium or large businesses and public sector organisations, businesses that meet certain criteria whereby they qualify as a small business do not take on the responsibility of determining the IR35 status of a contract.

If you are uncertain of how these new rules will affect you or your company when engaging in contracts after 6 April 2020 please do not hesitate to contact us for further advice.