IR35 – HMRC announce ‘light touch’ approach to penalties 18th February 2021 The new private sector off-payroll rules are due to start from 6 April 2021 and HMRC have published their latest guidance – here. The changes move the responsibility for determining a contractor’s IR35 status from the worker’s personal service company to the end client engaging them, where the end client is a medium/large business. If the end client has taken reasonable care to apply the new rules correctly, any mistakes will not be subject to penalties. HMRC have confirmed they will not use information they acquire from the changes to look back at previous tax years, unless they suspect fraud or criminal behaviour. They will also be using a specialist team to manage off-payroll working compliance activity. It is important for businesses to prepare as much as possible before 6 April, as this light touch will not apply to those who delay. As always, the Check Employment Status for Tax (CEST) tool should be the first step in determining a worker’s employment status.