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Budget 2018 - Employment taxes

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29 October 2018

Employment measure – IR35

Off-payroll working rules, usually where individuals provide their services through a personal service company (PSC), are commonly known as the IR35 rules. If such individuals would be regarded as employees, if directly engaged, the amount of tax payable under the IR35 rules should be broadly the same as for those employed directly.

In 2017, reform was introduced to address non-compliance, by shifting responsibility for applying the rules from the individual’s PSC to the public sector entity engaging them. This Budget extends this reform to medium-sized and large private sector businesses from April 2020. It is expected to raise £1 billion of extra revenue for the Treasury when it is introduced. 

Employment Allowance

This allowance entitles employers to a reduction of up to £3,000 per annum in their National Insurance bills. This allowance is to be restricted to employers paying less than £100,000 employer's NICs from April 2020.