On 6 April 2020 new legislation is expected to come into force, which will radically alter how organisations currently pay their contractors. Many contractors work through an intermediary, such as a Personal Service Company. Currently, it is up to the PSC to deduct appropriate PAYE and National Insurance Contributions when paying the contractor. As of 6 April, however, end-user clients will be required to (i) carry out a “Status Determination” to consider whether or not the contractor is an employee for tax purposes and (ii) deduct PAYE and National Insurance Contributions accordingly where this is the case.
The legislative proposals include other obligations, such as the need to provide a “status determination statement” exercising reasonable care and have in place a “status disagreement procedure” where the contractor disagrees with the client’s assessment. Liability to deduct PAYE and NICs will usually now fall on the end-user client, but it may also fall on another intermediary in the chain, for example an agency if there is one between the PSC and the end-user client. The government confirmed yesterday that they would take a “light touch” approach and people will not have to pay penalties for IR35 errors in the their first year of the tax changes, unless there is evidence of deliberate non-compliance.
This webinar aims to look at the ‘thorny’ issues around IR35 and the proposed legislative changes. What do we mean by “exercising reasonable care”? What are the risks associated with using umbrella companies? What happens if businesses don’t have everything in place by 6 April 2020? What steps should different parties be taking?
To find out more, listen to our Webinar, where Paul Jennings, Rachel Mathieson and Shadia El Dardiry discuss these issues and more with tax specialists Marianne Tutin and Colm Kelly of Devereux Chambers.