Are you ready?
We know you’re all a little IR35 fatigued, but with only weeks to go until the reforms take effect, now is the perfect time to recap on the latest IR35 updates and check your readiness for April 2020.
IR35 – the latest
Announced back in April 2018, the private sector IR35 reforms have been a long time coming. However, the months leading up to the reforms have seen a flurry of updates and changes, in particular:
- Updated CEST tool
HMRC’s Check Employment Status of Tax tool has been updated to provide an accurate determination of HMRC’s view on an individual’s employment status for tax and NICs. The updates include a redesign, clearer questions and new questions on substitution, business on own account and the provision of equipment.
- Government review
A government review into the IR35 reforms was announced in January. The review is looking into the implementation of the reforms and is not expected to delay implementation or change the substance of the rules. Accordingly, it’s business as usual.
- Changes to the operation of the rules
As part of the government review into the reforms, HMRC has announced that the off-payroll working rules will only apply to payments made for services provided on or after 6 April 2020. Previously, they were to apply to payments made on or after 6 April 2020, regardless of when the service was provided.
To learn more about IR35, get in touch with Mango Pay on 03300 580 190 or email firstname.lastname@example.org to arrange a callback.
IR35 – how are agencies preparing now?
The news is awash with businesses introducing blanket bans, issuing mass ‘within-IR35’ determinations and taking on existing contractors as permanent employees.
At Mango Pay, we’ve seen a steady increase of agencies auditing their supply chain to include only FCSA-accredited umbrella companies, and a subsequent increase in contractors moving to umbrella arrangements.
For agencies and businesses looking to do the same, it’s important to note that tax liabilities under the reforms can transfer through the supply chain. Therefore, it’s essential to work with a reputable and experienced umbrella company, preferably FSCA-accredited.
IR35 – what you need to do before 6 April
If you have left your IR35 preparations to the last minute, there’s still time to ensure compliance, but you must act quickly. Our IR35-specialists are on hand to explain the reforms, answer your questions, assess your contracts and help you devise a process for complying with IR35 going forward.