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Assessing whether IR35 applies

Rebecca Seeley Harris, director of Re:Legal Consulting, discusses the reforms to the off-payroll working rules in this recap of the tests for assessing whether IR35 applies in certain situations. She goes over founding cases, substitution, control and contracts and working practices.

StatusThe reforms to the off-payroll working rules, otherwise known as IR35, were brought into the public sector from 6 April 2017 and will be extended to the private sector from 6 April 2020. The draft legislation has already been published in the draft Finance Bill 2019-20 and we are currently awaiting confirmation of the legislation.

The new rules will apply to medium- and large-sized businesses that are the recipient of the services of a personal service company (PSC). Small businesses who use the services of PSCs will not have to apply the new rules; for those PSCs the rules will remain the same as now. The reforms will also apply equally to the public sector.