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IR35 - Delay of the Off-Payroll rules in the Private Sector

The implementation of the Off-Payroll rules were due to come into effect on the 6th April 2020 in
the Private Sector. Due to the ongoing spread of COVID-19, this has now been delayed until April
2021 with the main goal of this delay to help businesses and individuals deal with the economic
impact of the pandemic. Please note the delay to the introduction of the new rules is not a
cancellation and they are still due to be implemented in a years’ time.


The delay means that the current rules will continue to apply within the Private Sector in that the
individual providing services through their own PSC (limited company) is responsible for
determining the IR35 status of their role and the tax liabilities will sit with the PSC. From the 6th
April 2021, the responsibility for operating the Off-Payroll rules will move from individual contractors
and their PSCs to the end-client organisation, at which time they will be responsible for assessing the
status of any individual providing services through their PSC and passing this determination to both
the individual as well as the agency within the chain. This change will only affect medium and large
Private Sector organisations as there is currently a “small company” exemption, the definition of
which is based on the Companies Act 2006 and detailed below:


You must meet 2 of the following criteria to be defined as a small company and therefore the
implementation of the Off-Payroll rules will not apply from the 6th April 2021:


• You have an annual turnover of less than £10.2 million
• You have a balance sheet total of no more than £5.1 million
• You have less than 50 employees


As many clients had already made preparations for going Live on the 6th April 2020,
Creative Recruitment are engaging with our clients to ensure we are operating in line with their
business’s approach. Firstly to ensure that our clients are aware of the delay and secondly to
confirm their policy.


Please do reach out if you have any questions or if there is anything we can support you with during
these unprecedented times.


Email: IR35@creativerecruitment.co.uk


Please note, Creative Recruitment are Creative experts not Financial or Tax Specialists for further
guidance see the HMRC website here:


gov.uk/guidance/april-2020-changes-to-off-payroll-working-for-clients.