Updated Government guidance on off-payroll working (IR35)
IR35 rules are due to change from 6 April 2021. From this date, engaging businesses will be made liable for determining whether the IR35 rules apply. They will also be required to operate PAYE and pay employers' National Insurance contributions.
However, the changes will not apply to small businesses which engage contractors through Personal Service Company (PSCs). A PSC is a company which provides personal services of a single contractor to end clients either directly or through an agency. Typically, the personal service company will be a limited company that has a sole director – the contractor – who owns most or all of the shares. While there is no actual definition of what a Personal Service Company is, the term was devised by HMRC with the introduction of IR35 off-payroll legislation in April 2000.
The government has recently (11 January) updated its guidance pages on IR35.