What were the key changes in the new IR35 legislation?

The fundamental changes that were rolled out in the off-payroll legislation, labelled as the IR35 reforms, were:

The shift of responsibility: The responsibility for determining IR35 status shifted from the contractor to the end client or the fee-payer in the supply chain.

New requirements for end-clients: End-clients are now required to assess the IR35 status of contractors and should provide a Status Determination Statement (SDS) to the contractor and any intermediaries in the supply chain.

Expansion to the private sector: The new IR35 legislation applies to medium and large-sized private sector companies, as well as public sector organisations.

Increased employment taxes: Under the old rules, the contractor was effectively required to pay the employer's National Insurance tax bill as part of the deemed payment calculations. Under the new rules, the client must pay the employer's National Insurance on top of the payment made to the contractor, which cannot lawfully be deducted from the contractor rate agreed with the contractor.

These changes have significant implications for contractors, end clients, and intermediaries, and it is essential to put in place robust compliance procedures.