Implementation of IR35 legislation for the private sector remains on track


Brian Rudkin

Brian Rudkin

Director and Head of Employer Services


IR35 legislation was first introduced in 2000 to tackle perceived misuse of personal service companies (PSCs) for tax avoidance purposes. Where the services of an individual are provided through an intermediary such as a PSC to an end client, but the underlying relationship between the worker and client has the characteristics of employment, IR35 legislation is in scope and the engagement may be treated as an employment subject to PAYE and NI.

Over the past 20 years IR35 has remained topical across successive Governments, with reform already in place across the public sector. In April 2020 we see similar reform apply in the private sector for medium and large organisations, with the onus being on the organisation to correctly assess the employment status of service providers. HMRC’s factsheet can be found here and whilst they have introduced a tool to check employment status, “CEST”, this is widely recognised to fall short on capability and is unreliable, so should be used with caution. 

On 7 January 2020 the Government announced that an off-payroll review would be launched to ensure a smooth transition of the reform, as opposed to fundamentally changing anything.

The emphasis is very much on support, both in relation to implementation of the new regime, and also for the genuinely self-employed who will remain outside the scope of IR35. There is no mention of the legislation being delayed or withdrawn and so this is as strong an indication as we are going to get that the legislation is here to stay.

Brain Rudkin

Head of Employer Services

For more information about the impact of IR35 on your business and people working for you, please get in touch with a member of our Employer Services team