IR35 reviewed - 12 month soft landing period confirmed from April 2020

HMRC has published the findings of the government review into the IR35 off-payroll working rules that are due to come into force in April 2020.

As expected, there will be no delay to the implementation of IR35 but a number of changes have been announced and a communications programme to better explain how the rules will operate in practice has been launched.

The key changes are:

• customers will not have to pay penalties for inaccuracies relating to the off-payroll working rules in the first 12 months unless there is evidence of deliberate non-compliance

• HMRC will amend the legislation to exclude wholly overseas organisations with no UK presence from having to consider the off-payroll working rules

• The government will legislate to place a legal obligation on clients to respond to a request for information about their size from an agency or worker

“With the government having already previously postponed the extension of off-payroll working to the public sector, HMRC have now confirmed that there will be a soft landing period until April 2021.

This means that if employers or contractors have taken reasonable steps to comply but get something wrong, HMRC will not be pursuing them with fines and penalties which is great to news to hear!

The CEST tool link is here (Check Employment Status Tool).

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