Off-payroll working (IR35) rules affecting the private sector

Tax changes for new tax year 2020/202: Off-payroll working

From 6th April 2020, contractors working through a Personal Service Company, or Recruitment Agency providing services to Medium and Large businesses will be at risk of being deemed to work as an employee.

The end client is responsible for determining whether a contract is inside or outside of IR35. This change in legislation does not affect small businesses. According to Companies Act 2006 a small business is defined as one which meets two or more of the following criteria:

Annual turnover is no more than £10.2 million
Balance sheet total is no more than £5.1 million
No more than 50 employees
The government has produced two fact sheets 1) to explain why the changes have been introduced and 2) for Contractors to explain what to do if you are affected. 

At gHawk Accounting, we partner with tax experts and can advice on any complex tax changes. We can review your existing contract and advice whether it is caught by IR35 and what you can do to protect yourself. If this affects you, please contact us urgently.

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