October 28th, 2020 / Insight posted in Articles

Construction: HMRC confirms that controversial changes to IR35 rules will go ahead next April

The overhauled IR35 rules were due to come into force in April 2020 but were delayed due to the Coronavirus outbreak. The construction industry had hoped that the new rules would be delayed again, but those hopes were dashed by HMRC at the beginning of October when it issued letters to the industry confirming that the changes will go ahead as planned in April 2021.

On top of that, HMRC issued a statement regarding confusion over a clause within the off-payroll legislation that experts claim, if left unchecked could prove problematic for IT contractors who provide services to clients via umbrella companies.

The timing of this announcement could not have come at a worse time as many firms continue to fight for survival, while still living under the constant threat of yet further lockdown restrictions as the government continues to review its Coronavirus tier system.

We believe the new regime has major implications for organisations that contract with individuals who are providing their services via their own limited company. It is now more important than ever that organisations prepare for the off-payroll working rules ahead of April 2021 to ensure that this additional administration is dealt with correctly and efficiently.

To help you prepare and navigate the new rules Tim Stovold, head of Tax at Moore Kingston Smith hosted our latest off-payroll webinar, which you can view here along with the top five takeaway points from the webinar.

We hope you find this useful, but please do get in contact if you have any further questions or require any help. Further information, including HMRC’s updated guidance on the rules, can be found here.