Checking IR35 employment status
HMRC has launched a new software program to enable interested parties to check an individual’s employment status for tax. The new software will provide HMRC’s view as to whether IR35 legislation applies to a particular engagement and whether a worker should pay tax through PAYE.
Whilst the new software will be of most interest to the public sector in advance of the new rules coming into effect next month, the service can be used for current or future engagements in both the private and public sector.
The software can be used to check the employment status of:
- a worker providing services;
- a person or organisation hiring a worker; or
- an agency placing a worker.
HMRC has said that it will stand by the result given unless a compliance check finds the information provided was not accurate. HMRC will not stand by the results of contrived arrangements designed to achieve a particular outcome from the service. HMRC is clear that this would be treated as evidence of deliberate non-compliance and could result in higher penalties.
The new service is anonymous and results will not be stored online. However, the results can be printed and held for your own records. If any changes take place to the worker’s role, their status should be reassessed.