From 6 April 2017 the public sector employer or agency that engages the worker will have to review the employment status of the worker and decide whether or not to deduct tax and national insurance from payments to the worker even though he or she invoices for the services through their own company. An online tool called “The Employment Status Service” has been made available by HMRC and can help them make that decision. The tool can be used if the worker uses either an employment agency, or other third-party to get work.
These changes come on top of the restrictions on the tax deductibility of travelling expenses for IR35 workers that came into effect on 6 April 2016. Please contact us if you want to discuss whether or not these rules affect you or your organisation.