Other changes to IR35 effective from April 2021: Information requirements, status disputes and anti-avoidance
IR35 rules now require public sector clients, and, from 6 April 2021, medium and large private
sector clients, to inform the entity they directly contract with and the
freelancer or PSC of their determination (a “Status Determination
Statement” (SDS)) with their reasons. Determinations must be made on an
individual, not a blanket, basis.
All intermediary recipients of the SDS in the labour chain other than the
client and the freelancer or PSC must pass the SDS and the reasons for it
on to the person with whom they contract.
IR35 rules provide that where an SDS is issued that states that the
freelancer is within IR35, a PSC can challenge it, and the rules provide
for a “Status Disagreement Process” for resolving such disputes. Anyone
liable to determine status who does not do so, or does so without taking
the steps the rules require to ensure that the determination is carried out
with reasonable care, or if they do not fulfil any other IR35 obligation,
will be made liable for tax and NI, even if they are not the fee payer.
Please read our Guidance Note (which you can see here) for further detail.