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Disruption ahead
Key points
- Clients must consider contractors’ IR35 status before April 2020 to avoid disruption.
- The off-payroll rules impose a new tax bill on firms engaging ‘deemed employees’.
- Contracts with many affected workers will need to
- be renegotiated.
- HMRC and Treasury off-payroll assumptions ignore the behavioural impact.
- Failure by firms to address this issue risks spiralling costs and damage to projects.
Tax advisers should be well aware that the off-payroll working rules (ITEPA 2003 Pt 2 ch 10 – ‘Off-payroll working in the public sector’) will be extended to the private sector in April 2020. Businesses engaging freelance workers could experience major disruption unless they start immediately to prepare for the practical realities of the proposals.
Tax liability changes will significantly increase the cost of hiring contingent workers (temporary or contract workers) caught by the rules and the inevitable attempts by companies to mitigate their impact risk could cause project delays struggles to source talent ...
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