Chancellor Rishi Sunak has promised that penalties for IR35 breaches will not be 'heavy handed' during the first year of the implementation of off-payroll rules to the private sector.
Mr Sunak told business leaders in Birmingham that there will be a soft-landing penalty period where HMRC will allow organisations to adjust to new measures.
From 6 April 2020, the new tax rules will shift the responsibility for assessing employment status to the medium and large businesses employing the individuals.
Commenting on IR35, Mr Sunak said: 'We are shortly to publish a review of how it should be implemented with some tweaks and improvements to ensure that the transition is as seamless as possible.
'I can also tell you that I have spent time with HMRC to ensure that they are not going to be at all heavy handed for the first year to give time to adjust as well, which is an appropriate thing to do.
'What IR35 does is change the balance, so instead of people making the assumptions about how they should be taxed, we put the onus on the company to make that assessment for them.'