UK and International Tax news

HMRC Issues Guidance On Off-Payroll Working Rules From 2020

Thursday 12th September 2019

HMRC has recently issued guidance on the off payroll working rules which are to come into effect from April 2020.

The off-payroll working rules (commonly known as IR35) are supposed to ensure that individuals who work like employees pay broadly the same income tax and national insurance contributions as employees, regardless of the structure they work through. The rules do not affect the self-employed.

Following the most recent consultation on the detailed operation of the new rules, HMRC published the government’s final policy proposals and draft legislation in July 2019.

HMRC’s guidance covers the April 2020 changes to off-payroll working for intermediaries, in particular the changes to the off-payroll working rules where the worker provides services to a client and, in particular, where a worker provides their services through an intermediary such as their own personal service company, partnership, a managed service company, agency, or an individual.  If the rules apply, tax and NICs must be deducted from fees and paid to HMRC.

From 6 April 2020 all public sector authorities and medium and large-sized private sector clients will be responsible for deciding if the rules apply.

If a worker provides services to a small client in the private sector, the worker’s intermediary will remain responsible for deciding the worker’s employment status and if the rules apply.

If you would like more information on the above, please contact Keith Rushen on 0207 486 2378.

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