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IR35 in the Public Sector 2017 changes

When IR35 reform came into force in April 2021, there was little change in the Public Sector, as similar changes affecting all public-sector bodies were implemented in 2017.

If your client is a public-sector body rather than a private company, they are responsible for determining your IR35 status, and this has now been the case for more than five years. Unlike in the Private Sector where small companies are excluded, no public-sector bodies are exempt, regardless of their size.

What is meant by Public Sector?

HMRC’s definition of public sector bodies includes:

  • Government departments and their executive agencies

  • Many companies owned or controlled by the public sector

  • Schools and universities

  • Local authorities

  • Parliamentary bodies

  • The National Health Service (NHS)

What does this mean for contractors?

Because public-sector clients have been responsible for determining IR35 since 2017, you can reasonably expect them to have established processes in place. Resourcing and policy lessons that some private companies are still learning were learned some time ago and in general the market has had time to settle down and adjust.

However, being closer to government, public-sector bodies may be more likely to rely on the Government’s own online status tool Check Employment Status for Tax (CEST), which has been criticised since its launch for giving inaccurate results. We advise that the use of CEST should be backed up with additional assessment by IR35 experts.

If you have questions or if we can help in any way, please call our expert team on 01296 468483 or email info@orangegenie.com.

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