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 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.

If you engage individuals without operating PAYE for them as employees, you should identify all such individuals working for you through PSCs or other intermediaries, and the whole labour supply chain. You then need to determine those individuals’ status.

If you are an individual operating a PSC, you need to talk 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 will need to look at the rules and their impact on your net income. You might need to see whether your clients will actually be prepared to continue to deal with you through a PSC at all, and whether if they do, they intend to alter 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 will engage you as a self-employed individual: they might only be prepared instead to engage you as an employee, and, if so, you will need to consider what pay rate and other terms they will 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.