The UK’s IR35 Off-Payroll Working Rules are set to take effect today, 6 April. They will cover midsize and large private-sector organisations engaging contractors through their personal service limited company.

IR35 had been delayed for a year because of Covid-19.

A report published by the HMRC and IFF Research suggested that IR35 reforms will not have a significant impact on employment agencies. Other research said nearly half of UK freelancers plan to quit self-employment because of IR35 and the pandemic. Last week, ComputerWeekly.com said the government was facing renewed calls to scrap the legislation. On Monday, London Loves Business reported the IR35 changes are coming at the worst possible time.

SIA released a report, “IR35 Off-Payroll Working Rules: FAQs for suppliers,” based on HMRC guidance published on 24 February. It’s available to corporate members of SIA.

SIA’s Lexicon defines IR35 as:

“UK intermediaries legislation designed to tax ‘disguised employment’ at a rate similar to employment. In this context, ‘disguised employees’ means workers who receive payments from a client via an intermediary and whose relationship with their client is such that, had they been paid directly, they would be employees of the client and, therefore liable for tax and national insurance payments. Those who are genuinely self-employed will not face liabilities under IR35.”