Off Payroll working rules affect contractors who provide their services through their own limited company or through another type of intermediary to a client.
An intermediary is usually the worker’s own personal service company but can also be one of the following:
- A Partnership
- A limited Company
- An Individual
These rules have come into place to ensure contractors, who would usually have been deemed an employee for providing services to a client, pay broadly the same tax and national insurance contributions as employees.
The client is the organization who is or will be receiving the service of the contractor. They may also be known as the engager, hirer or end client.
From 6th April 2021, all public authorities and medium and large sized companies are responsible for deciding if the IR35 rules apply.
Medium and large sized companies are affected if they meet the following criteria:
- Have an annual turnover of 10.2 million or more
- Have a balance sheet of 5.1 million or more
- Have 50 employees or more
The below HMRC websites provide further guidance on the IR35 rules and will determine if the rules apply to a specific contractor.
Click here to go to the HMRC tool to determine liability
Click here to read the HMRC webinars on IR35 ruling
What should I do next?
Please contact Critchleys Payroll Services directly for more information should you require assistance in setting up a payroll under the IR35 ruling.
First published 2 August 2021
Last Updated 2 August 2021
2 August 2021
Find out more about Marc Taylor