Owen Daniels IR35 Rules
03rd April 2024

Is it time to look at your IR35 stance? New rules might mean so


In the wake of the autumn statement and the introduction of the offset mechanism, a notable shift is taking place in the business landscape, particularly concerning the engagement of outside IR35 contractors under the Off-Payroll Working rules.

The new offset mechanism, hailed as a remedy to address a clear unfairness in the tax system, is designed to ensure that HMRC collects the correct amount of tax due and prevents an overcollection of tax on engagements ultimately caught by the off-payroll rules.

This reduction in perceived risk has culminated in businesses taking a second look at their IR35 stance.  

What are the offset rules?

The offset mechanism introduced by the autumn statement empowers HMRC to adjust the PAYE liability of a deemed employer, factoring in tax paid by an individual and their Personal Service Company (PSC). It becomes instrumental in cases of errors or non-compliance with the Off-Payroll Working Rules.

However, it's crucial to note that the offset mechanism is not a one-size-fits-all solution. Its application is contingent upon instances of errors or non-compliance. While the offset mechanism adds a layer of nuance to navigating IR35, businesses should not solely rely on it as a silver bullet. Proactive management of IR35 status issues from the outset remains paramount. Establishing robust policies and processes is the key to ensuring compliance and avoiding potential pitfalls down the road.  

How can we help navigate the offset rules?

At Owen Daniels we’re here to help, not just with our own expertise. Our partnership with Kingsbridge enables us and our clients to access their award-winning IR35 solution.

This comprehensive solution includes:

  • Best-in-class hybrid status determination tool: A powerful tool for accurate determination of IR35 status.
  • Consultancy services: Our experts conduct a meticulous review of contractual engagements and IR35 processes, along with in-house training and hiring manager engagements.
  • Insurance option: Clients have the option to insure all outside assessments for defence costs and tax liability, providing an additional layer of protection.

We firmly believe that a proactive approach is the safest way to deal with the complexities of the Off-Payroll Working Rules. Engaging with specialists can help businesses build robust policies and processes to navigate the intricacies of IR35 compliance. Our commitment to this approach is evident in our work with thousands of clients, where we facilitate a thorough understanding of legislations among all stakeholders in the supply chain.

Seize the competitive advantage with comprehensive IR35 risk management

As we navigate a post-pandemic landscape, the role of flexible workers is set to be more pivotal than ever. Businesses that are willing to engage with PSCs stand to gain a significant competitive advantage. Access to the best talent, coupled with a strategic approach to IR35 compliance, positions forward-thinking employers as leaders in their respective industries. In conclusion, the offset mechanism introduces a valuable tool in the IR35 landscape, but it should complement, not replace, proactive compliance management.

Engaging with specialists and leveraging comprehensive solutions ensures that businesses can confidently navigate the evolving regulatory landscape, seize opportunities, and stay ahead of the competition.

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