Are you ready for IR35?
Private sector employers who hire contractors need to be prepared for the upcoming IR35 rule changes going into effect in April 2021. The rule changes were delayed in April 2020 due to the pandemic, but HMRC is making the changes official as of 6 April 2021. There are a few steps to prepare your payroll and tax filing before April to ensure compliance with the new regulations.
- Do you have workers hired through a personal service company or agency? HMRC has tools to determine employment status. Click here to use the HMRC tool: https://www.gov.uk/guidance/check-employment-status-for-tax
- Once you’ve reviewed the employment status of your contractors, discuss any changes with your team and identify how payments will be made going forward.
- Create new policies for hiring contractors in the future so payments are in compliance with IR35 regulations.
If your workforce is impacted by the new IR35 regulations, your payroll must be ready for the changes. Reporting and filing accurate tax and NIC payments to HMRC will ensure no penalties or audits will be needed. Getting started with a plan now will avoid a scramble when April comes around.
To optimise your payroll for 2021, start with your technology. Are you using a cloud-based platform? Do you have customised reporting and automated updates for new payroll regulations? Your payroll software can make a huge difference in your payroll compliance. Payescape has one platform to manage payroll, customised reporting, a CIPP-certified team to ensure compliance, and much more. Talk to us today to simplify payroll and prepare for IR35 changes.