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IR35 update: Planning ahead for April 2020

HMRC recently issued another update on IR35 and the proposed changes coming into effect in April. If you have not already started planning ahead, now is the time to start. In particular:

  1. Audit your contractors and identify whether any are operating through a personal service company (PSC). This is a company which is owned and managed by the contractor.
  2. If you engage any contractors via an agency your first approach should be to the agency. Ensure so far as possible that the contractors continue to be on the agency’s payroll and ensure that adequate indemnities are in place;
  3. Carry out a review of contracts with agencies and contractors, to make sure these comply with the new regulations.
  4. Establish a system for gathering the information required to determine deemed employment status and make sure this remains in place so that regular checks can be carried out to make sure nothing has changed.

It is important to note that under the new rules the ‘end user’ (i.e. the company hiring the contractor) will be responsible for determining deemed employment status (DES). This applies even if contractors are engaged through an agency. However, in such cases, the agency will usually be responsible for operating PAYE.

For further advice please get in touch.