There are some IR35 changes from April 2024 that can be taken advantage of now if needed. These apply to cases of non-compliance brought by HMRC where a mistake has been made in applying the off payroll working rules.
From April 2024 HMRC will take into account the taxes already deducted and paid against the amount the employer owes. Currently the deemed employer becomes liable for the full amount of Income Tax and National Insurance contributions.
Although this new policy comes into effect this April it will be applied to errors in payments since April 2017.
What you need to know now
It is possible to pause settlement of an off payroll working compliance check until after 6th April 2024 and so take advantage of the new rules. If you want to pause the settlement you will need to contact HMRC. HMRC will consider a pause if:
1. The compliance check has reached settlement and:
a. The organization has acknowledged an error in writing
b. The liability, including and penalty, has been agreed
2. The organization has the information required to calculate the set-off amount:
a. The worker’s full name and/or National Insurance number
b. The name and company registration number of the personal service company
You do not need to pause the settlement if you do not wish to and open cases will proceed as normal.
IR35 rules are complex, and many organizations stopped using off payroll workers, so it is not really surprising we now have changes to the legislation. HMRC have taken steps to improve their application of the rules and this is a welcome change.
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