From April 2021 the rules for engaging individuals through personal service companies are changing. The responsibility for determining whether the off-payroll working rules (sometimes known as IR35) apply will move to the organisation receiving an individual’s services. Small companies will be exempt which will mean a large number of charities will be excluded. The Companies Act definition will be used – to be small a company must meet two of the following conditions:

• annual turnover must be not more than £10.2 million
• the balance sheet total must be not more than £5.1 million
• the average number of employees must be not more than 50.

In response to consultations on this issue, CTG has argued that the definition of turnover should exclude donation and grant income – HMRC has now confirmed that this is the case. Read more via HMRC guidance notes for changes to off-payroll working for intermediaries and contractors, and for clients.

CTG news items

• HMRC off-payroll working (IR35) guidance
• Self-employment criteria and off-payroll working for charities
• Outcome of the review of the implementation of off-payroll working (IR35) reforms 
• Is your charity ready for changes to the IR35/off-payroll working rules from April 2020?
• Do you need to prepare for off-payroll working (IR35)?
• Turnover test for IR35 excludes donation and other voluntary income

Commentaries

• IR35 – don’t get caught out
• Does HMRC understand the off-payroll/IR35 rules?
• Reforms to off-payroll working in the private sector – the story so far and what’s next?
• Off-payroll working rules: what charities need to do to prepare
• Extending off-payroll tax rules to the private sector
• Off-payroll working: Major changes from April 2017