Question
20 years ago HMRC introduced IR35 rules. In April 2017 legislation was introduced for the public sector, making employers responsible for determining the tax status
20 years ago HMRC introduced IR35 rules. In April 2017 legislation was introduced for the public sector, making employers responsible for determining the tax status of their contractors who work through a limited company. From 6 April 2020 legislation requires large and medium-sized private companies to do the same. This will affect thousands of companies and up to 230,000 freelancers/contractors. Companies and recruitment agencies will be liable for unpaid tax if HMRC finds a worker has been wrongly classified.
A) Explain why IR35 rules were developed.
B) Explain why these changes are being resisted by both private employers and contractors.
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