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IR35 Changes and The Construction Industry​

28 January 2021

The 2020 Finance Act received Royal Assent on 22 July 2020.

The reforms to private sector IR35 intended to be introduced on 6 April 2020 will now be brought in on 6 April 2021.

Under the legislation, medium and large companies will need to assess if contractors providing services through personal service companies (PSCs) would be employees if they were engaged directly. If that answer is yes, the fee payer of the services will have to deduct PAYE and employee and employer National Insurance on the payments made to the PSCs.

The new rules will apply regardless of whether the company engages the PSC directly or via an intermediary such as an agency or payment company.

Construction companies need to prepare for the new rules prior to 6 April 2021.

  • Identify PSCs in your contractual chain;
  • Put processes and practices in place to make the required status determination and to ensure that the requirement of any challenge to the determination is met;
  • Have appropriate contractual provisions in place with third parties;
  • Implement any relevant changes to working practices;
  • Ensure that processes in place for payroll deductions are appropriate; and
  • If your company is exempt as a small company, ensure that you have evidence of this.

With over 20 years in this field, The Guild have the expertise to advise on IR35 matters and to ensure that you avoid unnecessary PAYE and National Insurance liabilities from April.

For a no obligation consultation please feel free to contact us on 020 8515 2975.
Alternatively, email us at contact@trusttheguild.com.

This article was originally published on the accountingWEB Insight Exchange on 25th November 2020.

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