Getting ready for IR35

The introduction of the new tax regime for consultants in the private sector is arriving soon.

From April 2020, the change will see many larger private sector businesses required to deduct income tax and National Insurance contributions via payroll from fees for services. This will apply in situations where fees are paid to a personal service company, but where the individual performing the services would (but for the personal service company) ordinarily be regarded as an employee of the client company for tax purposes.

The change is likely to affect purchasers of IT services, as well as agencies and IT service providers. You may need to review your arrangements and contracts ahead of the change to ensure compliance.

Mills & Reeve tax partner Kevin Lowe explains the changes and offers practical tips here.