Countdown to IR35 changes

IR35 – a recap

The off-payroll working rules which were introduced into the public sector in 2017, will be extended to all sectors from April 2020. This will make medium and large organisations and agencies responsible for ensuring that the individuals they engage through personal service companies pay the right tax and NICs.

Who does this apply to?

It is anticipated that from 6th April 2020 all public authorities and medium and large-sized private sector clients will need to apply the off-payroll working rules. Check out the April 2020 changes to off-payroll working for clients to see if this applies to your organisation, or whether you fall under the definition of a ‘small company’ and are therefore exempt.

What’s involved?

Under the reforms, the responsibility for determining whether the off-payroll working rules apply will move to the organisation receiving an individual’s services. This means that you will need to decide the employment status of the worker, and HMRC has provided a Check Employment Status for Tax (CEST) tool to carry out the evaluation.

Where the worker is determined to be a “deemed employee” they will need to be added to the payroll and have PAYE operated, meaning you will need to deduct and pay tax and NICs to HMRC and report the individual through RTI.

All ADP payroll products will allow you to add and identify your deemed employees. The individuals will then be subject to tax and NICs and be reported on the FPS.

If you’re concerned on how your business will remain compliant - please contact ADP UK today to find out how we can support your business needs.


The materials set out in this blog have been prepared by Automatic Data Processing Limited for informational purposes only and are not legal advice or a substitute for legal advice. You should not rely upon this information and you should seek professional advice if you have any queries.