Starting April 2025, changes in company threshold sizes will classify 14,000 medium-sized businesses as small, thereby adjusting the off-payroll working rules. This change, reported by Qdos, an IR35 compliance expert, is expected to exempt these businesses from off-payroll obligations. As a result, numerous contractors will regain the ability to control their IR35 status, which previously shifted to businesses beginning in 2021. The amendment is anticipated to alleviate compliance challenges for companies while benefiting contractors by restoring their authority over IR35 assessments, a move seen positively by both parties.
This redraws the boundaries of the off-payroll working rules and is ultimately a very welcome move - one that relieves thousands of businesses from the burden of IR35.
Under these contentious rules, contractors are responsible for determining their own IR35 status in engagements with small businesses.
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