Whitley Stimpson warns that private sector organisations need to prepare for the IR35 changes now
In the October 2018 Budget, the Chancellor announced that from April 2020 off-payroll working rules, known as IR35, will affect all private sector firms engaging temporary resource, thereby creating significant administrative challenges for many businesses.
It follows the reforms to IR35 in the public sector, which were introduced in 2017 and aimed at preventing working practices that HMRC regarded as ‘disguised employment.’
Experts at Whitley Stimpson, one of the largest independent accountancy practices in the area, with offices in Banbury, Bicester, High Wycombe and Witney, are keen to warn businesses that they need to prepare for the changes now.
Jonathan Walton, managing director of Whitley Stimpson, has his concerns: “The extension of these changes to the private sector will not be straightforward, and based on the public sector’s experience, any organisation in the private sector engaging temporary resource should be starting to plan now.”
IR35 originally came into effect in April 2000 and was designed to stop contractors working as disguised permanent employees – i.e. benefiting from the tax advantages of being a contractor without accepting the increased responsibilities of company ownership.
The new rules are expected to apply in just over a year’s time. Under them, the private authority or agency (the ‘fee payer’) that pays the PSC is also responsible for accounting for and paying income tax and NICs under PAYE to HMRC, on behalf of the worker. A consultation on the measures will be published in February 2019.
Jonathan says: “When planning for IR35 there are a number of considerations to take into account. Firstly, businesses must understand the legislation and how the rules apply to them, their contractors, and any agencies they may work with. Those who start the planning process now will give themselves a head start, minimise their risk, and ensure that they remain an attractive proposition for contractors.”
Whitley Stimpson has a fully qualified team of people to advise on all the latest payroll, legislation and contract issues.
If you or your business are at all worried by IR35, or have any questions, please contact Jonathan Walton, Managing Director, on 01295 270200 or JonathanW@whitleystimpson.co.uk.
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