The government has published plans on reforming off-payroll working rules in the private sector in the next stage of its consultation.
The changes, due to take effect from 6 April 2020, mean that if an individual is engaged by a medium or large-sized business and works through an intermediary, the engaging business will become responsible for assessing the individual’s employment status.
If the rules are deemed to apply, then the business, agency or third party paying the individual’s company will be responsible for deducting income tax and NICs through PAYE and paying employer NICs.
HMRC published a consultation document on 18 May 2018 seeking views on how best to address non-compliance with the off-payroll working rules in the private sector. This consultation ran until 10 August 2018. A summary of responses and fact sheet were published on 29 October 2018.
This next stage of the consultation is asking for views on a number of topics, including the scope of the reform and impact on non-corporate engagers, as well as information requirements for engagers, fee-payers and personal service companies.
Small companies are excluded from the reform. These are defined as those with an annual turnover of not more than £10.2 million, a balance sheet total of not more than £5.1 million, and 50 or fewer employees.
The consultation document can be viewed here