Changes to the off-payroll working rules (IR35), which were delayed last year due to the pandemic, are finally set to come into force from 6 April 2021. HMRC has now published a policy paper, setting out how it will support organisations in complying with the revised rules, and how it will deal with deliberate non-compliance. The key points coming out of the note are:
- As a general statement of principle, HMRC will support organisations who are trying to do the right thing and, among other things, help correct mistakes. It will also challenge deliberate non-compliance.
- There will be a 12-month “penalty holiday” for inaccuracies. This was announced previously, but HMRC has now confirmed that this will apply regardless of when the inaccuracy is identified. The “holiday” will not apply where there is evidence of deliberate non-compliance.
- HMRC will not impose a penalty where a mistake has been made in applying the rules or making a status determination where reasonable care has been taken to avoid that outcome.
The paper contains a number of case studies with examples of how support will be provided and non-compliance dealt with. This is largely helpful, but some of the case studies do not fully explain the position HMRC might take. The full policy note is available here.