Â鶹¹ÙÍøÊ×Ò³Èë¿Ú

The Government, through HMRC, has changed the IR35 tax rules. This affects the entire public sector – including the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú. Changes apply to the private sector from April 2021.

HMRC have published .

What is IR35?

IR35 or Intermediaries Legislation is a UK tax law.

It is about tax and National Insurance Contributions (NIC) for those providing services to a client through a Personal Service Company (PSC) or other intermediary e.g. limited liability partnership.

If IR35 applies to an engagement, then the engagement fee must be treated as deemed "employment income" for tax purposes and income tax under PAYE and NIC paid to HMRC.

If IR35 doesn't apply, then the fee can be paid gross to the PSC and the PSC can decide whether to pay this as "employment income". 

What has changed?

With effect from April 2017 all public authorities, including the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú, must now assess every engagement's "employment status" for tax purposes, including those engaged through a PSC, to ensure they meet their tax and National Insurance obligations.

Previously where an engagement was with a PSC, the PSC was responsible for this assessment. Under the new legislation, the legal obligation to determine the employment status for tax has been transferred to the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú.

Where the employment status assessment determines that an engagement is one of "employed" for tax purposes then the engagement fee will be deemed "employment income" for tax purposes and the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú will deduct tax under PAYE and employee's NIC.

Who does this affect?

IR35 applies to on-air contributors, like presenters as well as off-air freelancers like developers, who provide their services via an intermediary.

There are exceptions, for example: roles approved specifically by HMRC like actors and performers (covered by HMRC guidance note ESM4121), foreign entertainers (covered by Foreign Entertainers Unit rules) and contributors who are both tax resident overseas and providing their services wholly outside the UK.

Individuals (sole traders)

Individuals not providing services via an intermediary are not covered by IR35.

However, the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú already has an existing duty to assess an individual’s employment status for tax on their engagement. 

Personal Service Companies 

PSCs and other intermediaries are no longer responsible for assessing employment status for tax for engagements with public bodies.

However, they remain responsible for assessing employment status for tax for private sector engagements until April 2021.

IR35 Briefing Sessions - summer 2017

The Â鶹¹ÙÍøÊ×Ò³Èë¿Ú commissioned Deloitte to provide arms-length briefing sessions for individuals who may be affected by IR35 tax changes and/or the introduction of the CEST test. For more information,  and watch the video of the London session (note the presentation slightly changed after this recording):

HMRC discussions / Regulation 80 determinations

We have been in discussions with HMRC to provide certainty about the tax treatment of Â鶹¹ÙÍøÊ×Ò³Èë¿Ú fees paid to presenters.

While discussions are ongoing, HMRC will be issuing protective assessments known as Regulation 80 determinations for 2014/15.

We have written to everyone who we believe might be affected with more details. to find out more.

IR35 - Regulation 80 Webinar 16/04/2019

The Â鶹¹ÙÍøÊ×Ò³Èë¿Ú commissioned Deloitte to provide a webinar for individuals who may have received Regulation 80 determinations for the tax year 2014-15. The webinar provides answers to common questions, explaining why the Regulation 80 determinations have been issued and what your options are if you receive one, e.g. whether to appeal or settle.

This webinar also provides an update on the current position in regards to the proposed settlement with HMRC and what this may mean for you.

For more information,  and watch the video.

A transcript of the video is .

Downloads

External links

• gov.uk