One year on from the government’s reform of IR35 – the UK’s off-payroll working rules – and a picture is emerging of businesses struggling to recruit IT contractors.
The updated rules, introduced on 6 April 2021, mean it’s up to all medium and large-sized businesses to decide whether a worker is a contractor or an employee. The same rules also apply to public sector organisations.
If the business makes an incorrect assessment, it is responsible for paying lost National Insurance.
The government first introduced the anti-avoidance tax legislation in 2000. Its aim is to stop contractors from receiving payment via an intermediary, such as their own limited company, and distribute the profits in a way that avoids paying National Insurance and reduce their income tax bill....