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Most contractors unaware of IR35 changes

Contractors are still not fully aware of the changes to tax legislation that are set to take effect in a year's time, according to a survey from the Recruitment and Employment Confederation (REC).

IR35 rules were reformed for the public sector in April 2017, with the aim of preventing what HMRC regards as "disguised employment".

The same changes are set to be rolled out for the private sector in April 2020, meaning those who fall within the conditions of IR35, and the businesses engaging them, could face a higher tax charge.

However, the vast majority (91%) of REC members said their clients have only some or no awareness of the changes that are coming into effect.

A further 30% said they had no confidence in the Government's Check Employment Status for Tax tool, which is intended to help individuals assess whether they are affected by IR35.

The REC has urged the Government to publish the final legislation by October 2019, giving businesses six months to prepare.

Tom Hadley, director of policy and campaigns at the REC, said:

"Contractors and interim managers play an essential role within our economy - especially in periods of transition and uncertainty.

"The planned changes to taxation which are due to come into effect a year from now could significantly impede labour market agility at a time when UK businesses need it most."

Contact us to discuss the changes to IR35.