IR35 changes are soon coming into effect, meaning that from Tuesday 6 April 2021 the responsibility for managing IR35 moves away from personal service companies to our clients, who will assess the IR35 status of each engagement.
The IR35 rules provide that if the ‘Personal Services Company’ did not exist, however the Contractor looks like an employee of the client for tax purposes, then the assignment is deemed to be ‘inside IR35’. Therefore the Contractor’s pay should be subject to PAYE tax and national insurance. Employers’ national insurance will also be due. These new rules will apply to payments made to Contractors for work done on or after 6 April 2021.