11 March 2020
Deloitte comments on confirmed changes to off-payroll working in the private sector.
Mark Groom, employment tax partner at Deloitte, comments on proposals confirmed today that the government will go ahead with reforming the tax rules known as “IR35” in the private sector, effective from 6 April 2020:
“Hopes were dashed today for many contractors and some businesses holding out for a possible deferral of the new measures for a further year.
“So far businesses have reacted to the new rules in different ways, some imposing a complete ban on hiring contractors through PSCs. Others have opted to hire contingent labour only if employed through employment companies – known as Umbrella Companies.
“Those that are prepared to continue hiring PSCs do so at a considerable additional cost and risk. If a business gets IR35 wrong, it could face a tax and national insurance (NI) bill in excess of around 50%-60% of the fees paid to contractors for their services.
“Businesses now have less than a month to complete their preparation for the changes on 6 April. Many are nearly there, but those who were hoping for a u-turn today, now truly need to ‘get it done’.”
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