Reforms planned to IR35 rules

posted on 26 January 2017, updated on 27 January 2017

In the Autumn Statement 2016 the government confirmed that it will reform the intermediaries legislation in Chapter 8 Part 2 of the Income Taxes (Earnings and Pensions) Act 2003 (ITEPA 2003) often known as IR35. The government has published draft legislation for the Finance Bill 2017 that introduces a new Chapter 10 Part 2 of the ITEPA 2003.

Subject to Parliamentary approval and Royal Assent the measure will introduce 'off-payroll working in the public sector' legislation applying to payments made on or after 6 April 2017. The measure applies to contracts entered into before that date. If work is completed before 6 April 2017 but payment made on or after 6 April 2017 it will be within the new legislation.

More information and an online tool are due from HMRC shortly, in the interim please see this HMRC Technical Note.

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