![[UK] Status Determination Statements for contractors not needed from April 2023](http://gpa.net/cdn/shop/articles/bigstock-Hmrc-Sign-In-London-308836258_3_1200x.jpg?v=1665706368)
In the UK, HMRC has stated that limited company contractors will not need to complete or ever produce Status Determination Statements (SDS) after April 6, 2023, ContractorUK reports.
The statements are part of the Chapter 10 ITEPA off-payroll rules, which the government pledged at mini-budget 2022 to repeal and replace with IR35 (Chapter 8) from April 6, 2023.
However, advisers were reportedly concerned that in a bid to strengthen that ‘old’ legislation of 2000, HMRC would transpose the SDS requirement which public and private sector clients have been subjected to since April 6, 2017, and April 6, 2021, respectively, to PSCs.
The suspicion was that rather than just being able to claim they are outside IR35, contractors would have to formally record their determination and produce it should they be probed by HMRC.
As HMRC estimates compliance with the old but incoming Intermediaries legislation to be as low as 10 per cent, some advisers reportedly said that SDSs was “likely” to be a requirement for PSCs post-April.
But an HMRC spokesperson told ContractorUK, “Contractors will not be required to produce a Status Determination Statement to comply with the off-payroll working rules from April next year.”
So, there will be no statutory requirement for PSCs to produce an SDS from April 6, 2023, at which point the current requirement for clients to produce the statements will end too.
Keep records
However, since contractors and their PSCs will need to file tax returns based on the IR35 status that they determine, the details they keep are likely to be identical to those found in current SDSs.
The HMRC spokesperson said, “Contractors and their intermediaries will have to keep any records or documents that will be used to support their tax affairs.”
The Revenue has said it will also support taxpayers, with an education programme and full guidance on complying with IR35 to be launched well before the April 6 commencement date.
Administrative burden
Reading the Chapter 10/2021 off-payroll rule guidance - even if only as far as it relates to ‘small companies’ - is one way the department believes PSCs can get up to speed in the meantime.
A government spokesperson said, “We have repealed the reforms to the off-payroll working rules to simplify the tax system and reduce the administration burden on businesses which engage contractors, which in turn makes it easier for them to be more productive and grow.
“We appreciate some contractors will be determining their employment status for the first time while others will not have done so for a while. We will therefore support contractors to understand what they need to do from April 2023 and help them to get their tax right.”
Source: ContractorUK
(Quotes via original reporting)
In the UK, HMRC has stated that limited company contractors will not need to complete or ever produce Status Determination Statements (SDS) after April 6, 2023, ContractorUK reports.
The statements are part of the Chapter 10 ITEPA off-payroll rules, which the government pledged at mini-budget 2022 to repeal and replace with IR35 (Chapter 8) from April 6, 2023.
However, advisers were reportedly concerned that in a bid to strengthen that ‘old’ legislation of 2000, HMRC would transpose the SDS requirement which public and private sector clients have been subjected to since April 6, 2017, and April 6, 2021, respectively, to PSCs.
The suspicion was that rather than just being able to claim they are outside IR35, contractors would have to formally record their determination and produce it should they be probed by HMRC.
As HMRC estimates compliance with the old but incoming Intermediaries legislation to be as low as 10 per cent, some advisers reportedly said that SDSs was “likely” to be a requirement for PSCs post-April.
But an HMRC spokesperson told ContractorUK, “Contractors will not be required to produce a Status Determination Statement to comply with the off-payroll working rules from April next year.”
So, there will be no statutory requirement for PSCs to produce an SDS from April 6, 2023, at which point the current requirement for clients to produce the statements will end too.
Keep records
However, since contractors and their PSCs will need to file tax returns based on the IR35 status that they determine, the details they keep are likely to be identical to those found in current SDSs.
The HMRC spokesperson said, “Contractors and their intermediaries will have to keep any records or documents that will be used to support their tax affairs.”
The Revenue has said it will also support taxpayers, with an education programme and full guidance on complying with IR35 to be launched well before the April 6 commencement date.
Administrative burden
Reading the Chapter 10/2021 off-payroll rule guidance - even if only as far as it relates to ‘small companies’ - is one way the department believes PSCs can get up to speed in the meantime.
A government spokesperson said, “We have repealed the reforms to the off-payroll working rules to simplify the tax system and reduce the administration burden on businesses which engage contractors, which in turn makes it easier for them to be more productive and grow.
“We appreciate some contractors will be determining their employment status for the first time while others will not have done so for a while. We will therefore support contractors to understand what they need to do from April 2023 and help them to get their tax right.”
Source: ContractorUK
(Quotes via original reporting)