HMRC has issued new guidance 'Help to comply with the reformed Off-Payroll Working rules (IR35) and avoid common mistakes'. The title of the guidance may be confusing for some. 

This new guidance pack is aimed at entities who are dealing with workers who supply their services through intermediaries to public authorities or medium or large clients. It details processes to be followed in engaging workers, dealing with their taxes and reporting errors.

For those freelancing or contracting via their own Personal Service Company, the long-held nickname 'IR35' refers to the measures in Chapter 8 ITEPA 2003, which has been renamed as 'Workers' services provided through intermediaries to small clients'.

Conversely, the term ‘Off-Payroll Working’ covers all situations but now is generally applied to the measures introduced in Chapter 10 of Part 2 ITEPA: 'Workers' services provided through intermediaries to public authorities or medium or large clients'.

It would be helpful if HMRC could use terms to differentiate between the two different pieces of legislation, as confusing the two adds extra complexity that only serves to confuse taxpayers and their agents.

Useful guides on this topic

IR35
What is IR35? How does it work? How is the deemed payment calculated? What expenses are deductible?

Off-Payroll Working: PSCs & Private Sector Engagers
What is Off-Payroll Working? Who does it apply to? What are the rules?

Employment Status: Mutuality Of Obligation
What is mutuality of obligation? What do the courts say?

Employment status & detailed checklist
An employer (including an Employment Agency) must assess any worker's employment status so that they can fulfil their obligations under employment and tax law.

External Links

Help to comply with the reformed off-payroll working rules (IR35) — GfC4


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