Off-Payroll Working Rules: Are You Ready?

Whether you are a large or medium-sized organisation, paying workers via personal service companies or agencies, you will need to operate new off-payroll working procedures from 6 April 2020. The new rules will apply to partnerships, LLPs and larger charities, as well as limited companies. If you are classed as “small” under the Companies Act criteria, you will fall outside the new rules. Either way, from 6 April 2020, you will be required to determine whether or not your worker would be categorised as an employee of your organisation, if directly engaged. Your determination will need to be communicated to the agency supplying your worker, so that income tax and national insurance is deducted from any payments. With that in mind, you should use the Check Employment Status for Tax (CEST) software on the HMRC website to carry out that determination. You should also give a copy of your determination directly to your worker. 


Off-Payroll Working : What If Your Worker Disagrees?  

Where your worker disagrees with their employment status determination, they should contact you as the end user organisation straight away, setting out their grounds for their disagreement. You must then provide a response within 45 days of receiving the disagreement. During this time you (as the end user organisation) should continue to apply the rules in line with your original determination. 


Radio Presenter Wins IR 35 Personal Service Company Case in Off-Payroll Working Issue

The extension of the “off-payroll” working rules to the private sector, mentioned above is planned for April 2020. But in the meantime, tax tribunal decisions are still being decided against HMRC. In a recent case involving a radio presenter working for TalkSport, it was decided that the presenter would not have been an employee, if directly engaged. A key factor, was that the level of control over the presenter, fell far below the sufficient degree required to demonstrate a contract of service. The accountancy bodies have been lobbying the government to take the judges’decision in this, and the recent case involving Lorraine Kelly, into consideration, when they update their CEST software, used to determine employment status.

Lotuswise Chartered Accountants and Business Consultants can help you make sense out of off-payroll working rules & IR35, and help your business succeed. To find out how, please contact us. To also get even more useful business and finance information and tax advice tips, check out our app on Google or Apple stores.

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