IR35 changes imminent: what do they mean?

Following a one-year delay because of the covid-19 pandemic, the off-payroll worker tax rules for private sector clients are due to be introduced from 6 April this year. The rules set out two principal obligations for the private sector client under which it must: determine whether, had it contracted with its contractor directly on terms reflecting the actual arrangements, the contractor would be regarded as an employee of the client; and produce a ‘status determination statement’ (SDS) in respect of each contractor and the associated contractual engagement. While the questions raised by the new rules are complex and technical, as a practical matter they are likely to simply result in a game of contractual pass the parcel in relation to the new tax payment, risk and administration obligations away from the private sector clients and onto the contractors except where the contractors have very specialist skills required for specific projects.