Chancellor Philip Hammond announced that 2018's Autumn Budget will take place on Monday 29 October. This is an earlier budget than we hoped for; it hints that changes to IR35 in the private sector are imminent. It was late November ‘16 when the public sector changes were announced and many complained they were not given enough time to prepare. If the changes go ahead in April 2019, this will give companies an additional month to get ready.
What happened in the public sector and what does this mean for the private sector?
In the public sector, the client must tell the recruitment business whether a contractor falls inside or outside IR35. If the client says a contractor falls inside IR35, the recruitment business must deduct tax and NICs from the payments it makes to the contractor’s limited company. This is a very basic summary and in reality, the legislation is more complex. The industry predicts that these changes will be applied to the private sector, possibly as early as April 2019.
We also suggest that you keep talking to your clients about IR35. If your client is educated about IR35, they will be more likely to make sensible decisions on status, as and when the legislation hits.
What should you do now?
We’ll update you further after the Autumn Budget, but for now, we recommend that your contractors continue to take IR35 advice. Most contractors are familiar with getting their contracts reviewed, but an IR35 investigation is likely to look beyond the contract to “what went on in reality?” To help in this respect, your contractors can complete our IR35 Working Practices Review Form and we will give our opinion on whether they fall inside or outside IR35. It is also best practice, where possible, to ask the client to sign off on the working practices. That way, if HMRC start an enquiry, they’ll have supporting evidence to hand to put forward a strong defence.
We also suggest that you keep talking to your clients about IR35. If your client is educated about IR35, they will be more likely to make sensible decisions on status, as and when the legislation hits. You could also start working with your clients to determine the types of roles that will likely fall inside IR35, and those that may be outside the scope of IR35. The more your clients know about IR35, the better equipped they will be to make the right decisions over status. The last thing anyone wants is for a client to make a sweeping, reactive statement that all their contractors are inside IR35 without carrying out a proper assessment.
Our IR35 review services are designed to help assess IR35 status. We gather detailed information on our contractor’s circumstances via our IR35 Working Practices Review Form and review the contract(s) in place.
If you need IR35 advice or want more information on IR35, please email us at