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IR35 tax legislation changes for Contractors: April 2020

As you may have heard, the Government has announced that it will be making changes to the IR35 tax regime for contractors working for private sector clients.

The changes will take effect from April 2020 and may affect how tax is calculated and deducted from the pay of contractors who work via a personal service company.

The Government released the draft legislation on 11 July 2019 and this largely reflects the proposals which the Government consulted on in May 2019 (and which we reported on at the time), which we have explained in more detail below. The changes are expected to be passed by Parliament later this summer.

The Government has also announced some minor changes to the current regime for contractors working in the public sector, so that this mirrors the private sector regime. We have summarised how the changes will affect contractors working in the public sector below.