{"id":4457,"date":"2021-03-09T12:30:00","date_gmt":"2021-03-09T12:30:00","guid":{"rendered":"http:\/\/my-brains.co.uk\/jackross\/?p=4457"},"modified":"2021-03-09T12:52:39","modified_gmt":"2021-03-09T12:52:39","slug":"ir35-in-the-private-sector-2021","status":"publish","type":"post","link":"https:\/\/my-brains.co.uk\/jackross\/ir35-in-the-private-sector-2021\/","title":{"rendered":"IR35 in the private sector – 2021"},"content":{"rendered":"\n

Are you prepared for changes to the IR35 rules?<\/strong><\/span><\/p>\n\n\n\n

Exactly a year later than planned, changes to the off-payroll rules \u2013 known as IR35 \u2013 will take effect in the private sector next month. The emergence of COVID-19 delayed the changes affecting large and medium-sized private-sector organisations this time last year, but now it\u2019s for real.<\/p>\n\n\n\n

With lockdown restrictions still in place as the UK grapples to get on top of COVID-19, hopes were high that the Government might be considering kicking the can further down the road. But that seems to have evaporated with less than a month to go until the changes come in.<\/p>\n\n\n\n

Who does it affect most?<\/strong><\/span><\/h5>\n\n\n\n

The rules will affect medium and large-sized organisations, third parties or intermediaries, and contractors operating in the private sector. Small organisations are exempt.<\/p>\n\n\n\n

As many as 170,000 contractors in the private sector who operate through their own PSC will also be affected, along with some charities and third-sector organisations.<\/p>\n\n\n\n

The rules only apply to individuals who are considered to be working like employees under the current employment status tests, and do not affect the self-employed.<\/p>\n\n\n\n

Checking Employment Status.<\/strong><\/span><\/h5>\n\n\n\n

HMRC developed an employment status for tax tool (CEST) to determine whether or not a contract falls inside or outside of the rules, which was described as not fit for purpose, for not taking into account mutuality of obligation. <\/p>\n\n\n\n

In November 2019, HMRC launched an \u201cenhanced\u201d CEST tool in a bid to address these concerns. Since then, the tax authority claims the CEST test has been used more than 230,000 times by over 160,000 users.<\/p>\n\n\n\n

Penalties<\/strong><\/span><\/h5>\n\n\n\n

From 6 April 2021, accidental breaches of the off-payroll rules in the private sector will not be penalised for the first 12 months \u2013 unless there is evidence of deliberate non-compliance. <\/p>\n\n\n\n

In February 2020, HMRC said it would not open new investigations into PSCs for tax years prior to 6 April 2020, unless there is reason to suspect fraud or criminal behaviour. <\/p>\n\n\n\n

While this was before the COVID-19 pandemic took hold in the UK, this should remain the case from next month onwards.<\/p>\n\n\n\n

Options<\/strong><\/span><\/h5>\n\n\n\n

With HMRC adopting a light-touch approach towards penalties, you have 12 months before it starts really cracking down on non-compliance.<\/p>\n\n\n\n

If you haven\u2019t already prepared, start by using the CEST tool as soon as possible to see if any of your 2021\/22 contracts will fall within the IR35 rules. <\/p>\n\n\n\n

You can read our previous article published in 2019 here<\/a>, which covers more of the options available and more details about the original plans before COVID struck.<\/p>\n\n\n\n

We\u2019re happy to advise on the above, please feel free to call us on 0161 832 451 or drop us a line mail@jackross.co.uk<\/a>.<\/em><\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n


<\/p>\n","protected":false},"excerpt":{"rendered":"

Are you prepared for changes to the IR35 rules? Exactly a year later than planned, changes to the off-payroll rules \u2013 known as IR35 \u2013 will take effect in the private sector next month. The emergence of COVID-19 delayed the changes affecting large and medium-sized private-sector organisations this time last year, but now it\u2019s for… Read More »IR35 in the private sector – 2021<\/span><\/a><\/p>\n","protected":false},"author":17,"featured_media":4458,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","neve_meta_reading_time":""},"categories":[220,5],"tags":[27,221,111],"yoast_head":"\nIR35 in the private sector - 2021 - Manchester Chartered Accountants<\/title>\n<meta name=\"description\" content=\"Are you prepared for changes to the IR35 rules? 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