As expected for some time the proposed amendments to the IR35 rules have now been unveiled. These broadly reflect the current arrangements for the public sector but with some differences.

The good news for many is that there are no changes planned for “small engagers” who qualify as small under the Companies Act 2006 definition. The situation for these engagers will remain as it is today.

Medium and large engagers in the private sector will be subject to new rules probably from next April. Such engagers will be responsible for determining the employment status of the worker and communicating this decision to the worker and/or the fee-payer if different - eg a managing agent. If the contract falls within IR35 then it the responsibility of the fee payer to deduct PAYE and NI.

It is worth noting that, where there is for example an intermediary fee payer, if the fee payer fails to pay over the tax liabilities then this liability will pass up the line to the engager. Contracts need to be clear as to who is responsible for these debts.