March 18, 2020
It was planned that IR35 tax rules would be extended to medium and large companies in the private sector from 6 April 2020. This meant that if these organisations engaged individual contractors through personal service companies (PSCs), then they would be responsible for assessing the individuals’ employment status for tax purposes. This rule currently only applies to public sector organisations.
In practice, it means that if a contractor’s employment status indicates that they aren’t self-employed but are in fact an employee, then the organisation engaging them will be responsible for deducting tax and national insurance contributions on the payment made to the PSC. Currently, the PSC bears this responsibility.
The Government has confirmed that this decision is a deferral, not a cancellation, of the policy. Given the economic challenges that organisations may face in light of the Coronavirus outbreak, this will be welcome news for the business community. The delay gives medium and large private sector firms extra time to prepare for the tax changes, so they can focus their efforts on dealing with the current COVID-19 crisis.
The new rules will not be extended to organisations which are “small” companies under the Companies Act 2006, meeting at least two of the following criteria:
The annual turnover is no more than £10.2 million
The balance sheet total is no more than £5.1 million
There are no more than 50 employees
I have worked with Darwin Gray for a number of years and the level of service, professionalism and timely response is second to none. I would highly recommend Darwin Gray to any business.”
Darwin Gray have provided us with a first-class service for many years now. They really take the time to understand our business and develop relationships which results in advice and support that is contextualised and effective.”
We have worked with Darwin Gray for several years and have always found their services and advice to be first class.”
An extremely professional and sincere company who make time for your queries and understand the need to break down certain facts and information to ensure everything is understood perfectly. I would highly recommend the company to anyone looking for any type of legal advice”
PSS has worked with Darwin Gray for many years. We have always received an excellent service. Prompt and professional advice and support.”
We have used several departments within DG recently and we have been very pleased with an effective, efficient and down to earth service. Very happy thus far and I expect that we will continue to use DG.”
Darwin Gray offer us truly superb services. Very professional, quick and services available bilingually which is very important to us, highly recommend.”
My “go to” in urgent and time sensitive cases for direction, support and advice. The team are quick to respond to calls or emails for advice and support on all matters. Always explain complex matters in a way a lay person can easily understand.”