--- title: "UK: IR35 Tax Update – Clarifies End-User Liability When Supply Chain Fails to Pay" description: Following a pandemic-related delay, the IR35 tax regime will take effect in April 2021, but confusion remains regarding some parts of the legislation. image: https://learn.allegisglobalsolutions.com/hubfs/AGS_CM2020_Q4_FeaturedImages10.jpg --- Toggle navigation [![Allegis Global Solutions, An Allegis Group Company](https://learn.allegisglobalsolutions.com/hubfs/ags_logo.svg) Global Workforces Management Solutions | Allegis Global Solutions](https://www.allegisglobalsolutions.com/en) - [Consulting](https://www.allegisglobalsolutions.com/en/consulting) toggle menu - [Diversity & Inclusion Workforce Consulting](https://www.allegisglobalsolutions.com/en/consulting/diversity-inclusion) - [Solutions](https://www.allegisglobalsolutions.com/en/workforce-solutions) toggle menu - [Managed Service Provider (MSP)](https://www.allegisglobalsolutions.com/en/workforce-solutions/managed-service-provider) - [Enterprise MSP Solutions](https://www.allegisglobalsolutions.com/en/workforce-solutions/managed-service-provider/enterprise) - [Contingent Workforce Supplier Management](https://www.allegisglobalsolutions.com/en/workforce-solutions/managed-service-provider/supply-chain-management) - [Direct Sourcing Solutions](https://www.allegisglobalsolutions.com/en/workforce-solutions/managed-service-provider/direct-sourcing) - [Recruitment Process Outsourcing (RPO)](https://www.allegisglobalsolutions.com/en/workforce-solutions/recruitment-process-outsourcing) - [INTELLECT Hire](https://www.allegisglobalsolutions.com/en/workforce-solutions/recruitment-process-outsourcing/intellect-hire) - [RPO Flex: Short term recruitment](https://www.allegisglobalsolutions.com/en/workforce-solutions/recruitment-process-outsourcing/rpo-flex) - [AGS IGNITE Consulting](https://www.allegisglobalsolutions.com/en/workforce-solutions/recruitment-process-outsourcing/ags-ignite-consulting) - [Global Regional Capability](https://www.allegisglobalsolutions.com/en/workforce-solutions/recruitment-process-outsourcing/global-regional-capability) - [Procurement Solutions](https://www.allegisglobalsolutions.com/en/workforce-solutions/procurement-solutions) - [Universal Workforce Model](https://learn.allegisglobalsolutions.com/en/the-universal-workforce-model?hsLang=fr) - [Analytics](https://www.allegisglobalsolutions.com/en/workforce-analytics) toggle menu - [ACUMEN](https://www.allegisglobalsolutions.com/en/workforce-analytics/acumen) - [Market Analytics](https://www.allegisglobalsolutions.com/en/workforce-analytics/local-market-insights) - [Operational Analytics](https://www.allegisglobalsolutions.com/en/workforce-analytics/operational-insights) - [Technology](https://www.allegisglobalsolutions.com/en/hr-technology) - [Insights](https://www.allegisglobalsolutions.com/en/workforce-insights) toggle menu - [Case Studies](https://www.allegisglobalsolutions.com/en/workforce-insights/case-studies) - [White Papers](https://www.allegisglobalsolutions.com/en/workforce-insights/white-papers) - [Podcast](https://www.allegisglobalsolutions.com/en/workforce-insights/podcasts) - [Blog](https://blog.allegisglobalsolutions.com/?hsLang=fr) - [News & Events](https://www.allegisglobalsolutions.com/en/workforce-insights/news-and-events) - [Press Releases](https://www.allegisglobalsolutions.com/en/workforce-insights/news-and-events/press-releases) - [Awards](https://www.allegisglobalsolutions.com/en/workforce-insights/news-and-events/awards) - [Events](https://www.allegisglobalsolutions.com/en/workforce-insights/news-and-events/events) - [AGS In The News](https://www.allegisglobalsolutions.com/en/workforce-insights/news-and-events/in-the-news) - [Careers](https://www.allegisglobalsolutions.com/en/careers) - [Contact Us](https://www.allegisglobalsolutions.com/en/about-us/contact-us) ![AGS\_CM2020\_Q4\_Header\_Article9](https://learn.allegisglobalsolutions.com/hubfs/General_Global_CM_Q42020/AGS_CM2020_Q4_Header_Article9.jpg "AGS_CM2020_Q4_Header_Article9") # UK: IR35 Tax Update – Clarifies End-User Liability When Supply Chain Fails to Pay [The IR35 tax regime](https://www.gov.uk/topic/business-tax/ir35) will come into effect in April 2021, following a delay due to COVID-19. The legislation mainly affects so-called Personal Service Company (PSC) contractors – limited companies set up to service individual contractors who will be expected to pay tax and national insurance at the same level as full-time employees. However, there has been some confusion over who is liable to pay the IR35 tax if the PSC goes out of business or otherwise does not pay the tax due. Her Majesty’s Revenue and Customs, the department of the UK government responsible for collecting taxes, has clarified that liabilities extend to MSPs and agencies, as well as clients. For each contract, according to the legislation, end users are expected to issue a status determination statement to show evidence of the relationship between them and the PSC. They are also expected to complete due diligence on the PSC and any intermediaries to minimize liability risk. Takeaway: Organizations that work with individual service providers under the umbrella of a PSC should remain fully aware of their IR35 liabilities and responsibilities from April 2021 onwards. AGS provides expertise, leadership, and technology to help clients accurately identify and classify workers who may be subject to IR35, and proactively address compliance needs ahead of the new effective date. ### COVID-19 --- [Coronavirus Considerations for Businesses](https://learn.allegisglobalsolutions.com/compliance_monitor/q42020/covid19?hsLang=fr) ### North America --- [US: Worker Classification Laws Further Defined](https://learn.allegisglobalsolutions.com/compliance_monitor/q42020/us-worker-classification-laws-further-defined?hsLang=fr) [US: Federal Regulators Tighten Rules on H1-B Visas](https://learn.allegisglobalsolutions.com/compliance_monitor/q42020/us-federal-regulators-tighten-rules-on-h1b-visa?hsLang=fr) [US: Joint Employer Ruling Struck Down for Now](https://learn.allegisglobalsolutions.com/compliance_monitor/q42020/us-joint-employers-ruling-struck-down-by-court?hsLang=fr) [Canada: New Ruling Reinforces Employer Responsibility in Terminations](https://learn.allegisglobalsolutions.com/compliance_monitor/q42020/canada-new-ruling-reinforces-employer-responsibility-in-terminations?hsLang=fr) ### EMEA --- [UK: Migration Committee Advises Review of Shortage Occupations List](https://learn.allegisglobalsolutions.com/compliance_monitor/q42020/uk-migration-committee-advises-review-of-shortage-occupations-list?hsLang=fr) [Spain: Government Issues New Law on Remote Working](https://learn.allegisglobalsolutions.com/compliance_monitor/q42020/spain-government-issues-new-law-on-remote-working?hsLang=fr) ### APAC --- [Australia: Underpayment of Workers Prompts Fines](https://learn.allegisglobalsolutions.com/compliance_monitor/q42020/australia-underpayment-of-workers-leads-to-significant-penalties?hsLang=fr) [India: New Law Protects the Informal Workforce](https://learn.allegisglobalsolutions.com/compliance_monitor/q42020/india-new-law-adds-protections-for-informal-workforce?hsLang=fr) [Singapore: Government Tightens Requirements for Foreign Workers](https://learn.allegisglobalsolutions.com/compliance_monitor/q42020/singapore-government-tightens-requirements-for-foreign-workers?hsLang=fr) *This update contains general information only, and AGS is not rendering legal advice. Before making any decision or taking any action that may affect your business, you should consult qualified legal counsel. AGS shall not be responsible for any loss whatsoever sustained by any person or company who relies on this update.* [Facebook](https://www.facebook.com/AllegisGlobalSolutions)[Twitter](http://www.twitter.com/AllegisGlobal)[LinkedIn](https://www.linkedin.com/company/allegis-global-solutions)[Instagram](https://www.instagram.com/careersatags/)[YouTube](https://www.youtube.com/channel/UCTInYlMRroczeQlnxRWQwEQ)[Podcast](https://www.allegisglobalsolutions.com/en/insights-and-analytics/podcasts) ©2023 Allegis Global Solutions, an [Allegis Group](http://www.allegisgroup.com)Company. 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