Additional support will be available for businesses and contractors affected by the new off-payroll working rules, it has been revealed.
According to HM Treasury, “new initiatives” will support businesses as the changes come in, including a “light touch approach” towards penalties.
Coming into effect on 06 April 2020, the new off-payroll working rules (known as IR35) are aimed at contractors working through a personal service company (PSC) but are working as if they are employed, therefore enjoying the benefits of the corporate tax regime.
Under the new legislation, however, the burden of determining employment will be placed on the employer, who will also be held liable for any underpaid tax.
According to the Government, the new initiatives aim to address concerns and “smooth implementation of off-payroll working rules”.
This includes businesses not having to pay penalties for inaccuracies in the first year, “except in cases of deliberate non-compliance”, as well as launching a series of webinars and detailed guidance designed to help businesses get up to speed with the new rules.
Reassuringly, the Government has also confirmed that employment status changes resulting from the legislation will not trigger investigations for past tax years.
Commenting on the rules, Financial Secretary to the Treasury Jesse Norman said: “It is only right that the off-payroll rules are applied consistently across all sectors. Two people sitting side by side doing the same work for the same employer should be taxed in the same way.
“Following a review, the government is announcing a package of measures to help individuals and businesses implement these changes smoothly.”
For help and advice complying with the new off-payroll working rules, get in touch with our expert team today.