The government confirmed yesterday that the extension to the off payroll working rules (IR35) to medium and large organisations in the private sector companies will NOT be going ahead on 6 April 2020. It is to be postponed for a year, until April 2021.
However, please note that the old rules will still apply to private sector companies. This means that, as before, if:
-
you are a consultant providing services through an intermediary company (i.e. a personal service company (PSC));
OR
- you are a client contracting with an individual consultant via the consultant’s PSC
the individual consultant must assess the status of the relationship with their client and, if the working arrangements are such that the consultant would be an “employee” of the client but for the presence of the PSC, then the consultant will fall within the scope of IR35 and the PSC will be required to deduct Income Tax and NICs from any fees received from the client.
Given the current situation, this is unsurprising development and a welcome relief for many business already fighting for survival. For more information about IR35 or how to manage your staff through the Coronavirus outbreak, please contact the Employment Team on employmentexpert@prettys.co.uk or on 01473 232121.