Off- payroll changes could create ‘ confusion’ for many businesses
PAYROLL FIRM Hudson Contract is urging contractors and freelancers to avoid quick fixes as HMRC warns businesses to prepare for changes to off- payroll working rules known as IR35.
The government agency wrote to customers announcing it has relaunched its programme of support to help companies and contractors get ready for the new regime from April 2021.
Earlier this year, HMRC delayed the introduction of IR35 for 12 months to help businesses and individuals deal with the economic impact of Covid- 19.
In its new correspondence, HMRC said: “We recognise that businesses are facing difficult challenges due to Covid- 19. HMRC is providing information and support now to ensure businesses have plenty of time to prepare for the changes coming into effect in April 2021.”
IR35 rules apply if a worker
provides their services to a client through an intermediary, but would be classed as an employee if they were contracted directly.
The rules intend to make sure all workers pay broadly the same tax and National Insurance contributions.
From April 6, 2021, all medium and large- sized private sector clients will be responsible for deciding if the rules apply.
Ian Anfield, managing director of Bridlington- based Hudson Contract, said: “This announcement will go down like a lead balloon with companies and freelancers fighting for survival in a difficult trading environment with the constant imposition of new lockdown restrictions.
“In the best of times, businesses and freelancers found the HMRC guidance on IR35 difficult to follow, causing confusion and concern over liabilities. The latest set of guidance runs over hundreds of pages and invites companies to attend online seminars which HMRC plans to run between now and April next year.
“The confusion has created a vacuum for bad advice with socalled HR specialists and umbrella organisations offering services which could lead to incorrect... determinations.”