IR35: crumbs of comfort

Since 6 April 2017, special rules have applied where an individual’s services are provided via an intermediary to an organisation in the public sector.  Typically, these will be “contractor” type services provided via a personal service company (“PSC”).  Without waiting to see how well or badly the rules have worked in the public sector, the government decided to extend them to the private sector with effect from 6 April 2020.  We’ve previously commented here.

In response to widespread dismay at the change, the government commissioned a review (due to report by the end of February) to “determine if any further steps can be taken to ensure the smooth and successful implementation of the reforms, which are due to come into force in April 2020.”  There is no suggestion that any material changes will be made nor that calls for a deferral in implementation will be heeded.

Meanwhile, one minor change has been announced.

The new rules will now apply only to payments made for services provided on or after 6 April 2020 (rather than, as originally announced, to all payments made on or after that date).

However, that does not mean that they will apply only to contracts entered into on or after 6 April 2020: simply that they will apply only to work done on or after that date (but regardless of when the contract was entered into).

HMRC congratulate themselves that this “means organisations will only need to determine whether the rules apply for contracts they plan to continue beyond 6 April 2020, supporting businesses as they prepare.”

It was always slightly absurd that if your response to the new rules was to throw in the towel altogether and take affected subcontractors onto PAYE from the start of the new tax year, you nonetheless had to gen up on the new rules to deal with post-5 April payments to your (former) subcontractors for work done before that date.  Well, now you don’t.

For more information, please get in touch with your usual BKL contact or use our enquiry form.

This article was also published in Tax Journal Issue 1476 and is available on the Tax Journal website here.



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

Jon Wedge

While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.


Elana joined us in 2017 as an ACA trainee, after graduating from Durham University where she had studied languages. She is now a manager in our assurance team.


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