Autumn Statement brings IR35 changes
The Autumn Statement has brought with it, the first ever changes to the IR35 legislation since it was introduced by the government in 2000.
The thoughts behind the government deciding to make these changes, is to strengthen IR35 and to ensure that no matter what position someone holds in an organisation, no one will be able to act under ‘disguised employment’.
The changes, which were announced during the Autumn Statement earlier this month, are that IR35 will be extended to cover ‘office holders when they are working through a third-party intermediary’. At the moment only those working through an intermediary, who are considered to be employees of their end client, are inside IR35.
The Professional Contractors Group (PCG) have defined ‘office holders’ as being ‘someone who holds a substantive position which exists independently of that individual, and has typically been filled by a succession of individuals’.
The Treasury document explains: ‘The extension applies both where the worker is named as an office holder of the client but paid through an intermediary, and where the intermediary (third party) is named as the office holder of the client.
It applies in each case where the worker would be considered as an office holder of the client, if the services were provided directly under a contract between the worker and the client’.
It is thought that effects of the change will more than likely have an impact on very senior interims fulfilling titled positions, although the wider impact is not yet clear, as it is still at consultation stage. Any concrete changes will be announced with the government’s 2013 Finance Bill.
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