Summary of Changes to IR35 (Intermediaries Legislation) in the Public Sector

The proposed changes to IR35 announced in the 2016 Budget will come into effect from April 2017 tadalafil tablets. ‘Public sector bodies and agencies will be responsible for operating the IR35 tax rules that apply to off payroll working in the public sector. The rules will remain unchanged in the private sector.’ Consultation on the new changes ran from 26th May 2016 – 18th August 2016 and responses to the consultation are currently being considered.

Where workers are engaged through an intermediary, (either their own personal service company – PSC, individual or partnership), the public sector body, agency or other third party engaging them will be liable to apply the IR35 intermediaries rules and pay any associated Income Tax and National Insurance if necessary. Taxes will be reported through the Real Time Information PAYE system.

To determine whether the intermediaries rules apply, HMRC has developed a new digital tool which should give a definitive HMRC view on whether the rules apply to PSC’s working in the public and private sector. The bases on which the rules are applied have not been amended.

There will be a statutory right to appeal where a PSC or engager disagrees with the determination of the new rules. They will be able to request a formal review of the decision and appeal that decision to the tribunal.

Full details and information on the consultation can be found here