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Complying with April 2021 changes

Action needed to comply with April 2021 IR35 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, it is essential that both the individual and the business client are aware of whether the IR35 rules have the effect of reducing 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 to be or are already engaged by you without operating PAYE for them as employees, you should be clear as which if any of them are or will be working for you through PSCs or other intermediaries, and the whole labour supply chain. You should have determined those individuals’ IR35 status before engaging such PSCs or other intermediaries.

If you are an individual operating a PSC, you should have talked to your business clients and any intermediaries before they engage you about how they will or do implement the IR35 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 alter the rates they pay your PSC to reflect the impact on those clients of IR35. 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 services relating to the impact of IR35 on individuals and their PSCs.

See the IR35 Guidance Note and Checklists under "Related Documents" below for further details.

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