Budget 2018: IR35 rules change for private sector

31st October 2018

The Autumn Budget 2018 confirmed that many private sector contractors will no longer be responsible for deciding if they are caught by the IR35 rules. Engagers who are medium or large organisations will now decide the IR35 status of the PSCs they contract with.

What will constitute a medium or large organisation?

It is not yet known how the government will define this. The UK Companies Act 2006 definition is 50 employees or more, turnover of £10.2 million or assets of £5.1 million. Contractors will need to ask engagers about the size of their business to decide who is responsible for determining IR35 status.

When do the new rules start?

The Chancellor, Philip Hammond, has delayed the changes until April 2020 to allow time for the government to review the impact of Brexit and consult on the implementation of the rules. HMRC will be able to review and improve the CEST (Check Employment Status for Tax) tool.

The good news

HMRC has confirmed that they will be focusing on future compliance and not looking at previous tax years. If an engager decides that a contract is caught by IR35, this will not automatically trigger an enquiry into how the contract was previously treated.

More information about the Autumn Budget 2018 can be found in our Budget summary:

 

https://www.whitingandpartners.co.uk/wp/wp-content/uploads/2018/10/Autumn_Budget_2018.pdf

 



 
Other items in Blogs
 
Keith Day
7th February 2019 Businesses urged to prepare for post-Brexit Customs

HMRC is urging VAT-registered UK businesses which trade exclusively with the EU to be prepared for a no deal Brexit.   In a letter sent to 145,000 affected businesses, HMRC explains changes to Customs, Excise and VAT procedures in the ‘unlikely event’ that the UK leaves the EU without a Brexit deal.   HMRC’s letter…

Read More »

Adrian Mackenzie
7th February 2019 Beware of pension investment scams

The Insolvency Service has urged individuals saving for retirement to protect their pension pots from criminals and ‘negligent trustees’.   Research carried out by the Service found that criminals use a range of tactics to convince savers to part with their funds, including persuading individuals to access their pension and invest in unregulated schemes.  …

Read More »

Victor Courdelle
7th February 2019 MTD for VAT – pilot extended to all eligible businesses

  HMRC has extended its Making Tax Digital for VAT (MTDfV) pilot scheme to all eligible businesses. For most businesses, compliance with the regulations is mandated for VAT return periods beginning on or after 1 April 2019. However, MTDfV for some ‘more complex’ businesses has been deferred until 1 October 2019. This deferral applies to:…

Read More »

Stephen Malkin
1st February 2019 MTD for VAT: Which Bridging Software?

As we approach the 1 April 2019 deadline for the introduction of MTD compliant VAT submissions, many businesses will at last be focusing on what solution they should adopt.   If their current bookkeeping system does not already have an upgrade that automatically provides this new functionality, they will be considering adopting ‘bridging software’.   Looking through…

Read More »

Ian Piper
18th January 2019 CryptoCurrency Taxation: HMRC close loophole?

HMRC are not known for being ahead of the curve, so trying to find official guidance on how exchange gains from selling bitcoin, and other crypto currencies, is expected to be self-assessed and taxed, was always going to be ‘problematic’. At the time of first researching this, the latest HMRC guidance was published in 3…

Read More »

Peter Brown
13th January 2019 5 things you need to know about Making Tax Digital

  Making Tax Digital (MTD) is the hot topic this year. It’s one of the most fundamental changes to the UK tax system since the introduction of self-assessment. From April 2019, VAT registered businesses with a turnover of over £85,000 will be required to keep records using software approved by HMRC.  We have condensed the…

Read More »