Complying with April 2021 changes

If you are an individual or your business engages an individual, and payment is not made to the individual under PAYE, and the individual works through a PSC or other intermediary, both the individual and its business client should have checked well before 6 April 2021 to see whether the April 2021 changes reduce payments to the individual, increase the administration work or costs of either party, cause practical difficulties or give rise to any other commercial or financial impact.

Where individuals are engaged by you without operating PAYE for them as employees, you should have identified all such individuals working for you through PSCs or other intermediaries, and the whole labour supply chain. You then needed to determine those individuals’ status.

If you are an individual operating a PSC, you should already have talked to your business clients and any intermediaries about their implementation of the 2021 rules. You might be able to use your PSC for some clients but not others. In all cases you should have looked at the rules and their impact on your net income. You should have checked whether your clients are actually prepared to deal with you through a PSC at all, and whether if they are, they are altering the rates they pay your PSC to reflect the impact on those clients of the 2021 changes. Where any clients decide not to engage your PSC, it does not follow that they then engage you as a self-employed individual: they might only be prepared instead to engage you as an employee, and, if so, you need to consider the pay rate and other terms that they offer to you.

We recommend that you seek advice and guidance from suitable advisers or sources. Some firms offer IR35 services as to the impact on you of the 2021 changes.

See the Guidance Note for further details of the above.