IR35 Off-Payroll Tax

Off-payroll working rules change on 6 April 2021 and are applied differently, from that date all medium and large sized clients will be responsible for deciding the employment status of workers/contractors.

Who do the IR35 rules apply to?

The rules apply to all public sector clients and private sector companies that meet 2 or more of the following conditions:

  • An annual turnover of more than £10.2 million
  • A balance sheet total of more than £5.1 million
  • More than 50 employees

There will be a requirement by end clients to complete a Status Determination Statement (SDS) and communicated to the worker and the person or organisation in the supply chain. You must keep detailed records of SDS, including the reasons for the determination. If there are disagreements, you should also have a process in place to deal with them. Any disagreements must be responded to within 45 days of receipt, failure to respond within 45 days will result in the worker’s tax and NI contributions becoming your responsibility.

You must take reasonable care when you carry out SDS, failure to do so will result in worker’s tax and NI becoming your responsibility.

If you would like any further information about how this change impacts your business, please speak to your contact who would be more than happy to discuss in more detail.