Engagement of contractors
If you are a medium or large sized non-public sector organisation and you engage contractors, you should now be taking action to prepare for changes to the off-payroll working rules (IR35) coming into effect on 6 April 2021. For all contractors working through their own limited company, you need to:
- identify contractors who work in this way
- decide if they are inside or outside the rules
- inform your contractors of their status determination, and any agencies you engage with
- be ready to add them to payroll if needed
- be ready to deal with any disputes
- maintain a robust audit trail, and test your processes, systems and controls
More information can be found here www.gov.uk/guidance/prepare-for-changes-to-the-off-payroll-working-rules-ir35
If you are an employment agency which supplies contractors who work through their own limited company or other intermediaries, you need to understand the changes and may also need to take action. You need to:
- identify contractors who work in this way
- be ready to pass on the status determination statement to any agencies you engage with down the supply chain or be ready to put contractors onto payroll
- maintain a robust audit trail, and test your processes, systems and controls
More information can be found here www.gov.uk/guidance/help-and-support-for-off-payroll-working
If you are a small business the changes to the off-payroll working rules do not apply to you, or the contractors you may engage. This is because the contractor’s limited company or other intermediary will remain responsible for determining if the contract is inside the off-payroll working rules, and accounting for and paying the relevant Income Tax and National
Insurance Contributions. If the rules do not apply to you because you are a small business, tell your contractors.
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