Revenue Goes Forward With Controversial IR35 Changes

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Revenue has sent letters to the industry confirming the changes will take effect from next April.Industry experts said the movement would “collapse like a lead balloon” with businesses and entrepreneurs struggling for survival during the Covid crisis.

The current rules allow workers to be employed through a personal services company (PSC) which determines whether the IR35 tax rules should apply.

This responsibility will pass from next April to the entrepreneurs who will determine the employment status.

Self-employed people fear they will lose from higher tax payments, while entrepreneurs are also expected to face higher bills related to direct employment.

The changes were due to go into effect in April 2020, but have been postponed due to the coronavirus outbreak.

Construction had hoped the new rules would be delayed again, but those hopes were dashed by HMRC this week.

HMRC said: “We recognize that businesses face difficult challenges as a result of Covid-19. HMRC is now providing information and support to ensure companies have enough time to prepare for the changes that will take effect in April 2021.

Ian Anfield, managing director of payroll specialist Hudson Contract, said: “This announcement will go down as a lead balloon with businesses and freelancers struggling to survive in a tough business environment with the constant imposition of new job restrictions. locking.

“At the best of times, companies and freelancers have found HMRC’s guidelines on IR35 difficult to follow, which has created confusion and raised concerns about liability.

“The latest set of guidelines spans hundreds of pages and invites companies to participate in webinars that HMRC plans to hold by April next year.

“The confusion has created a vacuum for bad advice with so-called HR specialists and umbrella organizations offering services that could lead to incorrect and potentially damaging decisions for businesses and freelancers.

“Freelancers could find themselves in the worst of all possible worlds, paying employer and employee taxes, but without any of the benefits of being truly employed and their clients would risk losing access to a valuable resource.” they refuse the conditions. ”

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