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Off-Payroll Working in the Private Sector (update)

Posted On: 31/07/2019

Update: July 2019

Further to our article in April this year, draft legislation has now been published which sets out the intended changes to the Off-Payroll Worker provisions. The changes will come into effect in April 2020 for medium-sized and large businesses only.

This means that for medium and large sized businesses, the end clients will be responsible for determining the IR35 status of the contractor, and the agency or end client will be responsible as the ‘fee-payer’ for deducting the relevant tax and NIC before paying the contractors. 

Private sector organisations which are small will be exempt from the new rules (and the current IR35 provisions will continue to apply to those cases). Companies (which include LLPs for these purposes) are small if they meet two of the following three tests:

Unincorporated businesses will simply have to satisfy the turnover test. 

It is important therefore that all organisations which use off-payroll workers are aware of the changes being brought in and take all necessary preparatory steps well in advance of next April.

This document explains the change and how the government is responding to the latest consultation on the extension of the reform to the off-payroll working rules in further detail. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/818816/OPR_Factsheet_.pdf

This document explains how you can prepare for the changes. https://www.gov.uk/guidance/prepare-for-changes-to-the-off-payroll-working-rules-ir35 

If you have any concerns call HMRC for help with IR35 enquiries. Telephone: 0300 123 2326

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