Prepare for tax changes

Prepare for tax change if you engage or supply contractors – Off-payroll working rules (IR35).

If you are a medium or large sized non-public sector organisation and you engage contractors, you should now be taking action to prepare for changes to the off-payroll working rules (IR35) coming into effect on 6 April 2021.

For all contractors working through their own limited company, you will need to:

  • identify contractors who work in this way
  • decide if they are inside or outside the rules
  • inform your contractors of their status determination, and any agencies you engage with
  • be ready to add them to payroll if needed
  • be ready to deal with any disputes
  • maintain an audit trail, and test your processes, systems and controls

If you are an employment agency which supplies contractors who work through their own limited company or other intermediary, you need to understand the changes and may also need to take action. You need to:

  • identify contractors who work in this way
  • be ready to pass on the status determination statement to any agencies you engage with down the supply chain or be ready to put contractors onto payroll
  • maintain an audit trail, and test your processes, systems and controls

You can find more information about the actions you need to take to prepare here: https://www.gov.uk/guidance/prepare-for-changes-to-the-off-payroll-working-rules-ir35

Please talk to us about pre-tax year end planning for your business – we are here to support you in preparing for the new tax year and beyond!