An easier and softer approach has been agreed with contractors in light of the new laws to try to help them make sense of whether their subcontractors are within the new off-payroll rules or not.
HMRC and the Chancellor commented last week that there will be a transitional period of 12 months for the new off-payroll working rules for the 12 months following implementation. But this is not in relation to the rules it is really only about the penalties which would be applied should the engagement be considered classed as wrong. The new rules will not however be used as a justification to go back to previous years and inquiry into a status previously. That would only come about if there was suspected fraud or criminal behaviour.
Despite this being one of the most dramatic changes in contractual employment in the UK there are options still available and sight should not be lost of the true contractor and subcontractor engagement. Remember this is all about (IR35) which is the engagement with someone who is an employee ‘in all but name’ and mainly affects the medium to large business. In the past, it was the contractor and freelancer who set the status not it is the company so many fear the loss to SME businesses which are now affected but the current rules.
So it is not all at an end but the new regulations will mean many companies simply don’t want to take the risk with this arrangement and will either get rid of contractors or move them to effectively being full-time employees, full-time employees who will not get sick pay, holiday or parental rights.
Please get in contact with Brendan Kelly on 0141 2040930 if you require further guidance and a case-by-case review.We offer expert accountancy help and advice with a free initial consultation.