HMRC has published draft Statutory Instruments on the reforms to Intermediaries legislation, off-payroll working rules, due to come into effect on 6 April 2020 and are asking for comments on the draft technical note.
Despite the concerns raised by many employers in the private sector over the timing of the changes, secondary legislation will extend the rules that are currently in force for the public sector since April 2017, to medium and large-sized organisations in the private sector.
From 6 April 2020, these organisations will be responsible for operating IR35 rules for all workers operating through their own Personal service Company (PSC). This shift in responsibility means the organisation that contracts with the PSC will need to determine if that worker is ‘caught within’ the IR35 rules and if so, PAYE must be applied to an amount of deemed income.
The measures being introduced are to improve compliance in this sector and minimise potential loss in revenue.
Views are being sought on the scope of the technical draft for government to make secondary legislation allowing HMRC the power to recover unpaid PAYE liabilities from other relevant parties in the labour supply chain, namely the first UK-based agency in the chain, or alternatively from the client receiving the individual’s services, where this cannot be collected from the deemed employer within a reasonable period.
The consultation will close on 19 February 2020.
Details of the full consultation are contained on the following link to the technical draft:
tax information and impact note, draft primary legislation and a draft explanatory memorandum
Additional draft regulations included are:
Income Tax (Pay As You Earn) (Amendment) Regulations 2020
- The Social Security Contributions (Intermediaries) (Miscellaneous Amendments) Regulations 2020
