HMRC messaging on IR35 changes

HMRC has published the findings of research which sought to assess the effectiveness of HMRC’s messaging and communications materials which were designed to inform contractors of the changes to the IR35 rules in the private sector which will now be introduced from 6 April 2021.

Based on the findings of 30 interviews with contractors who provide their services through personal service companies, the report Communications research: off-payroll working rules (IR35) found a high level of awareness and understanding of the changes in industries where the use of contractors is common. In contrast, awareness was lower in industries with fewer contractors.

The findings showed that contractors wanted detailed information from HMRC about the changes, to give them a clear understanding of the reforms and how they would personally be affected. A focus on what would change in terms of how they meet their tax obligations, rather than a general explanation of the changes, was widely preferred among the research participants.

Materials which clearly and objectively outline how the reforms will affect contractors’ tax obligations were found to be particularly effective and HMRC’s case studies were appreciated for ‘the reassurance they offered participants and for providing relatable examples of what would change for contractors’.