The government has confirmed that it will follow through with its proposed reforms to off-payroll working arrangements in the public sector, with responsibility for operating the IR35 rules moving to the body paying the worker’s personal service company, rather than the personal service company itself, with effect from April 2017. In addition, the 5% tax-free allowance available to personal service companies when applying IR35 will be removed to reflect the fact that workers no longer bear the administrative burden of deciding whether the rules apply.

Whilst not surprising, confirmation of this decision will be disappointing for many operating in the public sector, particularly given the additional financial and administrative burdens the proposed changes will entail at a time when budgets are already stretched to breaking point.