Personal service companies: commitment to IR35 review confirmed
The measure
The Government confirmed its commitment to review the IR35 rules for intermediary companies. In the coalition agreement published in May, the Government set out that it would review IR35 and seek to replace it with simpler measures that prevent tax avoidance but do not place undue administrative burdens or uncertainty on the self-employed, or restrict labour market flexibility.
Who will be affected?
Individuals who operate their businesses through personal service companies.
When?
No timetable has been announced for the review but further details are expected shortly.
The IR35 rules have been around for approximately 10 years and are generally well understood. For those engaging individuals through a personal service company the rules provide certainty over their PAYE withholding and National Insurance obligations. However, the individuals providing their services have the burden of correctly assessing whether the rules apply to each of their engagements. The review is therefore likely to be followed closely by these individuals.
