Many medium-sized businesses delay adopting new IR35 rules

More than half of mid-sized businesses do not have a formal process in place to track off-payroll workers according to new research released by BDO.

The findings reveal that 55% of business leaders are using contract workers but will worry about IR35 when business is back to normal after the pandemic. This leaves businesses susceptible to investigation by HMRC given that the new IR35 rules for the private sector took effect five months ago.

Since 6 April 2021 private sector employers apart from small businesses as defined in the Companies Act 2006 have been responsible for deciding whether or not the contractors they use are de facto employees and therefore if PAYE and National Insurance deductions should be made from payments to them.

Although HMRC announced a ‘soft landing’ in the first year for those who fail to fully comply from autumn a...