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HMRC and IR35

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HMRC and IR35

  • Publish Date: Posted over 3 years ago
  • Author: IR35 Team

Whilst we’ve all now got to grips with the main points around IR35, we take a deeper look at HMRC and some the areas End Clients may need to be aware of.

Will the Private Sector reform commence in April 2021?

By all accounts, yes. Despite continued resistance within the contractor community, HMRC are keen to ensure the Private Sector roll out goes ahead in April.

Can we expect a soft landing?

HMRC had originally suggested that they may take a soft approach to extending IR35 into the Private Sector with no plans for heavy enforcement expected for the first 12 months. Government officials appear to confirm that this approach will stay in place from April 2021 – although it’s clear that organisations should not see this as extra time to get their IR35 strategy right. It’s crucial that businesses use the lead up time to prepare Hiring Managers and ensure that processes are in place to make accurate determinations.

Will HMRC review previous contracts?

Paystream, one of our Umbrella company providers, confirms that HMRC will not be actively reviewing retrospective determinations.

What’s HMRC stance on blanket status assessments?

HMRC have been extremely clear that End Clients cannot apply a blanket assessment on a group of contractors. They expect reasonable care to be taken when making status determinations – and that means individually assessing assignments.

They do however recognise that in some situations – such as assignments with standard job roles, identical working practices and standardised contractual terms – the same status determination may be derived. This should not however be a standard approach for all engagements.


Supporting you to get IR35 right

We’re committed to working with our clients to ensure they’re fully prepared for IR35. As members of the Association of Professional Staffing Companies (APSCo), we’re best placed to give you the latest guidance. APSCo’s Legal team play an active role on HMRC’s IR35 Forum – ensuring members are given the best guidance to support clients preparing for the IR35 reform.

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