Contractors Given More Time Ahead of Off-Payroll Tax Changes

DEVELOPERS WHICH TAKE on off-payroll workers are to get more time to prepare for tax changes ahead of their rollout later this year.

The changes, which put more obligations on medium and large developers and contractors, as well as some additional obligations on public authorities, were due to come into force for all payments made after 6 April 2020.

The changes would have affected payments made regardless of when the service was carried out.

However the change will now be introduced on services carried out after 6 April, instead of he payments, giving businesses more time.

Review ongoing

The government review relating to these tax changes is still ongoing, due to end this month.

A statement from HMRC on the matter read: “A common issue raised over the course of the review has been businesses’ concerns over what payments the rules apply to and from when. The government has listened and taken action early to give businesses certainty and more time to prepare to ensure the smooth and successful implementation of the reforms that come into force in April.

“The rules, also known as IR35, will now apply only to payments made for services provided on or after 6 April 2020. Previously, the rules would have applied to any payments made on or after 6 April 2020, regardless of when the services were carried out.

“It means organisations will only need to determine whether the rules apply for contracts they plan to continue beyond 6 April 2020, supporting businesses as they prepare.

“The off-payroll working rules have been in place since 2000. They are designed to make sure that an individual who works like an employee, but through their own limited company, pays broadly the same Income Tax and National Insurance contributions as those who are employed directly.”

While the review is ongoing, the draft off-payroll working legislation can be found here