Testimonials
We have known Paul for many years and trust his ability to care for us in this area.
Paul from Billingham
I am very comfortable with the service and the way my finances have been set up.
Richard of Hemel Hempstead
Off-payroll working in the private sector (IR35)
A new consultation has been launched to make sure that people who effectively work as employees pay the right amount of tax. Existing off-payroll working rules (IR35) were introduced in 2000 and are intended to stop individuals avoiding employment taxes by working through their own company. This affects contractors including IT consultants, management consultants, and project managers.
In April 2017, the government reformed the off-payroll working rules for engagements in the public sector. Public authorities are now responsible for determining whether the rules apply and deducting and paying the appropriate taxes. External research on initial implementation shows that the reform has had relatively little impact on projects or vacancy filling in the public sector.
It is estimated that in 90% of cases within the private sector, the IR35 rules are not applied correctly.
As announced at the Autumn Budget, this new consultation will specifically look at how to increase compliance with the existing ‘offpayroll’ working rules. These rules mean that contractors such as IT and management consultants who work through their own company but are in practice employed by a third party, pay the right tax as employees. Last April, the government reformed off-payroll working in the public sector, successfully increasing compliance. The change has meant £410 million in additional revenue. This consultation includes the option of extending those reforms to the private sector, although no decisions have been made. It draws upon the lessons from the public sector change, by consulting on how the rules can be improved for the private sector, and includes alternative options for addressing non-compliance.
These rules do not affect the genuinely self-employed.
The consultation will close on 10 August.
The Financial Conduct Authority does not regulate tax advice.
