HMRC has just introduced legislation to change the way private sector organisations pay contractors. The new off payroll legislation will extend to the private sector affecting thousands of IT professionals and consultants to ensure employees and contractors are paying the same employment taxes for similar work completed.
HMRC made changes to the public sector off payroll rules last year, and since then has raised more than £550 million in income tax and National Insurance over the course of the year. They are now proposing the same changes to the private sector for medium and large companies, so tax and insurance calculations will now have to change for contractors and individuals providing services using a personal service company.
Many agencies and associations have spoken out against this new reform, arguing that this new legislation will negatively affect organisations that use contractors for highly skilled work in IT and other industries. HMRC does not appear to be changing course or making adjustments despite the negative feedback to the proposed changes.
Payroll teams need to stay ahead of the changes to ensure compliance with new HMRC regulations. If your payroll solution cannot support the compliance for new regulations, your company could be at risk for fines and penalties. If you are concerned about how new IR35 rules will affect your team, talk to us – we can help identify potential payroll challenges with the new changes and give you solutions to improve your process. Click here to learn more
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