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What does IR35 mean for contract workers?
There are advantages and disadvantages for being a contract worker. With IR35 Off-Payroll rules affecting the private sector in April 2021, the updated legislation is likely to impact the large majority of UK’s self-employed workers. HMRC has ascertained that many contract workers, and for that matter businesses, are not playing by the rules. The proposed change to IR35 assure that the lost employer’s National Insurance can be collected – estimated to be close to £ 1 billion a year.
From April 2021, the responsibility will fall on end-user/client to decide whether contractors fall in or outside IR35, regardless whether the intermediary be an agency, labour supplier or payroll company. It will be the medium to large size businesses that meet HMRC’s criteria that will have to vet each worker, or in some cases, prohibit all self-employed workers from being on their sites.