Guidance relating to IR35 has been updated by taxation body HM Revenue & Customs for the first time since the new rules were rolled out in April 2017.

The online update, which has been split into two parts, focuses mainly on the question that has been posed by many contractors – namely which organisations the IR35 rules apply to.

The taxation body confirms that the IR35 rules apply only to 'public authorities', before going on to define exactly what constitutes a public authority and offering several examples.

The updated guidance also covers a change that was made to the IR35 legislation, which meant that retail firms serving the NHS which were operating in the private sector, were not included under the rules.

The second part of the update outlines the responsibilities of an end-client who is impacted by the IR35 rules and lists "what they need to do to follow the off-payroll working rules.”

The taxation body stated: “As a public authority, you’ll need to decide if the off payroll working rules apply and tell the worker, or the agency or other labour provider who supplies the worker, if they apply.

“You’ll need to do this before the contract or the work starts (whichever is later). If the contract was entered into before 6 April 2017, you’ll need to inform the relevant person of your decision before the next invoice payment is made," added HMRC.

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