Important changes to the way work: IR35 legislation

Significant changes will come into effect on 6th April, which will affect people working for a public sector organisation through an intermediary or personal service company (PSC) where the work is deemed to be within IR35. The changes will ensure individuals who work through a PSC pay employment taxes in a similar way to employees. The government consulted on the changes in December 2016 and consultation ended last month. Over the past week HMRC have made it clear the changes will be implemented 6th April.

Responsibility for deciding if the off-payroll rules apply currently rests with the individual worker but from April 6th, responsibility moves to the public body (i.e. the organisation you might work with) and as such, the public body will be required to tell HMRC whether the role sits within or without the IR35 ruling.

HMRC believe around 90% of public body engagements will fall within the IR35 rule so all individuals working within the IR35 rule will need to pay employment taxes commensurate with those paid by employees. Having considered our position carefully we have determined that Navigate Associates who undertake work within the IR35 ruling must be employed through an umbrella company who will provide assurance to HMRC that all deductions have been made at an appropriate level enabling compliance with the ruling. We understand this position may affect your decision about future working. Further information on the reform can be found here:

https://www.ipse.co.uk/sites/default/files/documents/guides/Guide_to_IR35_in_the_Public_Sector_2017.pdf

https://www.gov.uk/government/publications/off-payroll-working-in-the-public-sector-reform-of-the-intermediaries-legislation

http://www2.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2017/01/16/ir35-change-looms-for-public-sector-organisations.aspx#

Since inception in 2005, Navigate has provided a range of opportunities for associates to work on interesting projects which make a difference.  We will continue to provide these opportunities but we must ensure our associates and company remain compliant: we hope you will continue your interest in working with us.