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IR35 - HMRC's Grace Period Has Officially Ended

on Monday, 20 June 2022.

Since the off payroll working rules were extended to the private sector on 6 April 2021, HMRC issued a 12 month grace period for businesses to adapt to the new rules.

HMRC has previously issued guidance ensuring that fines will not be issued for the first 12 months unless there is evidence of deliberate non-compliance. However since this grace period has ended, businesses should be adopting a cautious approach and ensuring that they are complying with the off payroll working rules to avoid facing financial penalties and reputational damage. HMRC will assess and explore the systems and processes organisations are using and conducting compliance checks. Businesses should be readily prepared for these checks and seek advice surrounding any engagements that they are concerned about.

Organisations and contractors should ensure that they are aware of which engagements may be 'inside IR35' and how to reduce the risks of the off payroll working rules applying. Our experts are also able to advise and assess situations in which IR35 may not apply such as if overseas contractors are being engaged and what criteria and tests to be mindful of when considering this.

For specialist advice on the off payroll working rules, please contact Zahra Gulamhusein in our Employment team on 07887 994 368 or complete the form below.