Less than a month ago, the government announced that it would repeal the IR35 off payroll rules from the start of the new tax year in April 2023. Those plans have now been scrapped by the new chancellor, Jeremy Hunt.
This means that most businesses and organisations will need to continue carrying out status determination statements when engaging individual consultants via intermediaries such as personal service companies and to pay any tax required.
If you fail to do so or you get the status determination wrong, you will be liable for the tax and national insurance contributions. The 12 month grace period (which provided some leniency for organisations making genuine mistakes) ended in April. This means that if you make a mistake, you'll also have to pay penalties and interest.
In an attempt to reassure the markets following the reaction to the catastrophic mini-budget, the Chancellor has said that it aims to reduce its spending and increase revenue. It's therefore likely that HMRC will try to recover as much outstanding tax as possible and may prioritise its IR35 investigations.
How we can help
HMRC's calculator Check employment status for tax - GOV.UK does not always get this right and there have been many cases where businesses have used it and still been landed with a significant tax bill. For a fixed fee we can provide an IR35 assessment which includes a detailed report setting out how our assessment was made and what factors are particularly relevant to each case.
We are also planning an event in December where we will discuss IR35 in detail.
If you would like further information on either of these please contact Charlotte Sloan.
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We also have a fixed price employment law service. Please contact Gordon Rodham if you'd like to find out how we can help you avoid these sorts of problems or need help to resolve any other employment law issues, with our fixed-fee annual retainer, or flexible discounted bank of hours service.