HMRC published a new policy briefing earlier this week, which outlined the ‘compliance principles’ for implementing off-payroll working (IR35) rules. The guidance reiterates the employer’s responsibility to determine the individual’s employment status, under the new IR35 rules.
HMRC has confirmed they will not be issuing any penalties in the first 12 months, for any inaccuracies. However, penalties will still occur if there is deliberate non-compliance.
In the publication, HMRC also confirmed that it will not use information, under the new IR35 rules, to open enquiries into returns for tax years before 2021/22. However, if HMRC has reason to suspect fraud or criminal behaviour, an enquiry will be opened.
Ongoing feedback regarding problems with off-payroll working arrangements has encouraged HMRC to create an education programme to help and support employers/contractors in preparation for the change.
HMRC will provide support for determining employment status and give advice on best practice. The support will be provided through webinars, workshops and one-to-one phone calls. However, HMRC have stated that they will not make employment determinations on behalf of the employer/contractor.
The changes to off-payroll working (IR35) rules take effect on 6th April 2021. For more information on changes to the IR35 rules, visit our article ‘Off-payroll working (IR35) rules are changing on 6th April 2021’.