New legislation will change the way you manage your labour-only contractors.
In April 2020, the risk profile for a private sector business which engages limited company contractors will be changing.
Under the new draft legislation, the obligation for determining the IR35 tax status will now be a matter for the end user client, and not the limited company contractor.
This applies whether there is any other intermediary involved, such as recruitment agencies. The draft legislation provides for the “fee payer” (being whoever pays the limited company contractor) to be obliged to account for employer national insurance, apprenticeship levy and PAYE when making payments to the contractor. It will be as if the individual supplied to do the work is an employee of the fee payer.
There is some good news for small end user companies which are exempt from the new legislation. But it’s not just about complying with this legislation: it’s about ensuring you’re prepared for it in advance of 2020.
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