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Increasing Compliance with the Off-Payroll Working Rules (‘IR35’) from April 2020

To increase compliance with the existing off-payroll working rules (often known as IR35), medium and large organisations in all sectors of the economy will become responsible for assessing the employment status of individuals who work for them through their own limited company.  The reform does not introduce a new tax or apply to the self-employed, who are outside the scope of the existing rules.

The reform was introduced in the public sector in 2017.  At Budget 2018, the Government announced that it would be introduced to other sectors from April 2020, giving organisations time to adjust and prepare.  Outside the public sector, the reform will not apply to the smallest 1.5 million organisations, minimising their administrative costs.  Following a further consultation in Spring 2019, the Government has published its response to the submissions received, confirming the detailed design of the reform and the obligations on different parties. It has also published the draft legislation for the reform.

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