Discover more: Off-Payroll Working: Reform of IR35 for the Private Sector
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Businesses need to plan early and engage with their advisers to understand how any changes could affect them.
The key IR35 tests are control, personal service, and mutuality of obligation. Ideally, assessments will need to be undertaken for each contractor and repeated regularly (six monthly) including each time a new contract is entered into. Employers should consider not only working terms and conditions but the wider regulatory framework covering the sector that they operate in. There is likely to be enhanced HMRC scrutiny on those organisations operating in high-risk sectors.
Ultimately, HMRC expects to raise significant additional tax revenues as a result of these measures and, therefore, it is really a question of determining how this economic burden is shared between those employers that make use of contractors and the workers themselves.