Employment Tax

Changes to the Off Payroll Working Rules

In my article in January 2020, I highlighted that reforms would be introduced in respect of the off-payroll working rules (also known as the intermediaries legislation, or IR35) for all medium and large organisations in the private sector. Under such reforms all such organisations would be responsible for assessing the employment status of individuals who provide services to them through an intermediary, typically, a Personal Service Company.

The changes were due to come into effect on 6 April 2020 but due to the Coronavirus pandemic to help businesses and individuals deal with the economic impact of the pandemic the introduction to such changes was delayed until 6 April 2021. The delay to the introduction of the changes was not a cancellation but simply a deferral; unless there are any specific developments this date is likely to stand.

With 6 April 2021 drawing ever closer businesses who may be affected should be prepared and ready to take on the new responsibilities once the reforms take effect. If a business (the engager) utilises workers who provide their services via their own limited company, either directly or via an agency, then the IR35 legislation may apply to the engager.

There is an exemption for small businesses but all other businesses will be responsible for determining the IR35 status. The legislation states that the engager must take reasonable care in how they make the determination. Once made the engager will be responsible for communicating the results to the next party in the supply chain in the form of a Status Determination Statement.

HM Revenue & Customs have been running “talking point webinars on the off-payroll rule and the next one coming up on 21 January 2021 is in respect of International matters” explaining how the off-payroll working rules interact with international and overseas issues.

If you would like to discuss how the new rules might affect your business or if you wish to discuss any aspects of the Off payroll Working rules Sarah would be delighted to talk to you and let you know in more detail how she can assist.

Sarah Lawrence-Williams Employment Tax Specialist

This article was kindly written by our trusted partner, Employment Tax Specialist, Sarah Lawrence-Williams

Contact details:

Mobile 07770 220 573  

Email:   williams21@ntlworld.com

You can find out more here:

https://www.gov.uk/government/consultations/draft-secondary-legislation-off-payroll-working-rules-from-april-2020

If you have contractors that you need to add to your payroll, or maybe have a friend that needs to set up a PAYE scheme, go ahead and contact our friendly team on 02074981133!

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