Navigating IR35 changes in the public sector
Thu, April 06, 2017
Back in May 2016 the government published its proposal for reform of the off-payroll rules (IR35 or intermediates legislation) and the Autumn statement confirmed the Government’s plan to press ahead with these changes despite nationwide opposition.
The new IR35 assessment rules are targeting contractors operating in the public sector and the changing regulations and responsibilities will have a significant impact on public sector bodies and employers. It is essential for those involved to have a strong grasp of the IR35 rules to prepare themselves and effectively manage the inevitable impacts it will have on those affected.
With approximately a quarter of a million personal service companies (PSC’s) operating in Britain, and HMRC estimating that the cost of non-compliance in 2016-17 could reach up to £440m, this new initiative has the potential to raise significant additional tax revenues. Whilst the government stated in December 2016 that it is not currently planning to extend the reforms to the private sector, it may only be a matter of time before they revisit this, particularly if they deem the change a success.
