IR35 comes into effect on 6th April

After a postponement of 12 months the new rules for IR35 will come into effect from April. IR35 is legislation which aims to ensure that contractors are paying the appropriate amount of tax.

Under the new rules, it will be the organisation that engages a contractor who will be responsible for determining their employment status and assessing whether or not IR35 applies. If IR35 does apply, the organisation that pays the individual’s fees is deemed to be their employer for tax and national insurance purposes.

Prior to April 2021 contractors were required to determine their own status as employee or contractor but the liability passes to medium and large-sector clients. Smaller clients will be exempt from the obligation and in these cases the contractor remains liable for determining their own tax status.

Employers should review their contracts and put in place the necessary procedures to ensure compliance.

Don’t Forget - Statutory Payments Increase in April 2021

SSP (Statutory Sick Pay) increases to £96.35 per week from 6th April.

Statutory maternity, paternity, adoption, shared parental leave and parental bereavement leave increase to £151.97 per week from 4th April.

Source: Gavin Parrott