WHAT HAPPENS IF YOUR CONTRACT EXTENDS BEYOND APRIL 6TH?
If your end client (or agency) has decided your work will be inside IR35 when the reforms are introduced on 6th April, you can still be paid for work through your limited company, in the same way as you have previously, until 5th April, even if your contract extends beyond that date.
This is particularly important to contractors whose first payment after 6th April relates to work both pre and post implementation. In this case, HMRC expect to see the payment apportioned in a ‘just and reasonable way’.
On Friday, HMRC announced that the ‘…changes will now apply only to payments made for services provided on or after 6th April 2020. Previously, the rules would have applied to any payments made on or after 6th April 2020, regardless of when the services were carried out. It means organisations will only need to determine whether the rules apply for contracts they plan to continue beyond 6th April 2020, supporting businesses as they prepare.’
Whilst you certainly need to have your alternative working option (such as JSA Umbrella) lined up and ready to go from April 6th, you do not need to (and should not) rush into closing your PSC. Indeed, when you work with JSA, you can toggle between PSC and Umbrella as your circumstances allow.
Please visit our IR35 information centre to see how we can help PSC contractors to prepare for the IR35 reforms.