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IR35 on the way out?

HMRC has consistently not been able to collect the IR35 tax liabilities it believes are due.

Just as a reminder the IR35 regime requires the operation of PAYE on income your company (or partnership) receives for providing services to a third party under terms such that the service provided would count as employment if provided directly.

Currently you have to decide whether or not IR35 applies and HMRC has the right to challenge.    However, from April 2017 things are changing;  for government bodies including a wide range of organisations such as schools, local authorities, hospitals, Transport for London, etc, the decision and payment responsibility falls on them.

The body must decide if IR35 applies and if so has to operate PAYE and account for employer’s NIC.  Any misjudgement will be their responsibility which, in reality, means PAYE is more likely to be applied than not.

 

 

Date: 17th May, 2016
Author: Cathy Corns

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