What’s going to change?


The private sector is set to see reforms to off-payroll working (IR35) in April 2020. Just like the public sector reforms in April 2017, the main purpose of the 2020 reforms is to increase compliance with the current IR35 rules by correctly discerning those who are self-employed from disguised employees.


The key change that these reforms seek to make is giving the end client the power to decide a contractor’s IR35 status, instead of the contractor deciding their own status which happens now under the current rules. If a contractor is found to be inside IR35, then they will have to pay tax through the PAYE system since they will be seen as an employee.


There are some key aspects to the private sector reforms that are worth mentioning:

  • The reforms only affect medium and large businesses, so the current rules stay the same for small businesses and their contractors
  • Unlike the 2017 public sector reforms, the 2020 reforms won’t be retrospective. This means that if a contract was started before the April deadline, it won’t be affected by the reforms