Payroll Legislation

IR35: Off-Payroll Working Update

Legislation

IR35: Off-Payroll Working Update

Due Date

Ongoing

Summary

IR35: off-payroll working

It’s been six months since the off-payroll working rules changed. Anyone who is  engaging contractors working through their own limited company via one of these contracts should make sure they are applying the rules correctly.

HMRC offers help with enquiries about the off-payroll working rules, and helps to check Employment Status for Tax (CEST) tool (below). HMRC can be contacted by phone on 0300 123 2326, also there’s webchat available on their website.

Who pays tax for off-payroll workers: intermediaries or PSCs?

Responsibility for reporting the tax and NICs of workers employed in these circumstances will change from the public sector client (PSC) or intermediary (typically an individual’s own company, or partnership they work through) to the employer. It is the responsibility of the public sector client to inform the intermediary, agency, or third party with whom they have a contract whether or not the contract falls within the new off-payroll rules.

Student Loans should not be operated for such workers when on PAYE – these should be done via Self Assessment instead.

The Check Employment Status Tool

The Check Employment Status Tax tool (CEST) is already available for organisations and contractors to consider the appropriate employment status for tax for contracts running beyond 6 April 2021.

HMRC will stand by the results given by the CEST tool, provided it is used in accordance with our guidance and the information entered is accurate, and remains accurate. This is regardless of when the tool is used ahead of April 2021. This means you can already use the tool for engagements that start in April 2021 onwards.

Payroll Legislation Guide

This FREE seasonal guide includes advice on payroll legislative updates as they happen – quarterly advice on all updates in an easy-to-read format.

Download Guide

Making payroll & HR easy