Guide to IR35 in the Public Sector
At the 2016 Autumn Statement, the Chancellor confirmed that from April 2017, in the public sector only, IR35 status will be determined by the client not the contractor. If the public sector client decides that IR35 should apply to the engagement, payment to the contractor’s company will be taxed at source – as if they were an employee.
IPSE strongly opposed this proposal, both directly to the Prime Minister and senior officials, and via a written submission to the consultation. Unfortunately, the Government decided to push ahead with the proposal regardless.
There is still much we don’t yet know about how the new legislation will work in practice. The real extent of the difficulties it will cause will not become apparent until the middle of 2017.
This new guide explains what this change means and what contractors can expect when working in the public sector. As we learn more we will update this guide.