Following a year of delays because of Covid-19, the private sector IR35 tax rule change is now in force. Formally known as off-payroll working rules, the new legislation shifts the onus of tax liability from the contractor to their employer who will now be responsible for assessing the tax status of every contractor it hires. If a contractor is considered a 'deemed employee', which means they provide services via an intermediary (such as a limited company) that would make them an employee if they had been engaged directly, then it becomes the employer's responsibility to make the necessary income tax and National Insurance payments, not the contractor's. SMEs with a turnover below £10.2 million and fewer than 50 employees are exempt from the new rules.
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