Tax Off-payroll working rules: are your clients ready

Source: HMRC

If your clients are contractors or engage or supply contractors, they may be affected by the off-payroll working rules (IR35). These come into effect on 6 April 2021 so your clients need to take action and prepare now.

Our education and support is helping agents to understand the changes, so please share this information with your clients to help them get ready. 

If your clients are contractors who work through their own limited company:

They should now be making sure they understand the changes to the off-payroll working rules (IR35). You can help them by sharing the contractor factsheet and other resources.

Because we know some contractors may be looking to change the way they work, we’re highlighting guidance and support for contractors who may be doing this. Please share this with your clients as they will find it useful and it will help them to steer clear of tax avoidance schemes. 

Some contractors who work through their own limited company will not be affected by the rules because they supply services to a small non-public sector organisation. These clients will need to continue to apply the off-payroll working rules. 

If your clients are organisations:

·         clients who are medium or large-sized non-public sector organisation and who engage contractors, should now be taking action to prepare for changes. For all contractors working through their own limited company they need to:  

·         identify contractors who work in this way

·         decide if they are inside or outside the rules

·         inform their contractors of their status determination, and any agencies they engage with  

·         be ready to add them to payroll if needed 

·         be ready to deal with any disputes 

·         maintain a robust audit trail, and test their processes, systems and controls

Clients who are employment agencies which supply contractors who work through their own limited company or other intermediary, need to understand the changes. They may also need to take action and will need to: 

·         identify contractors who work in this way

·         be ready to pass on the status determination statement to any agencies they engage with down the supply chain or be ready to put contractors onto payroll

·         maintain a robust audit trail, and test their processes, systems and controls

We have recently published details of how we intend to ensure customers comply with the rules, expanding and updating our previous statement about our intended compliance approach. We have committed to taking a supportive approach and help customers who are trying to do the right thing. We also committed that customers will not have to pay penalties for inaccuracies relating to the off-payroll working rules in the first 12 months unless there is evidence of deliberate non-compliance. This intent has not changed.

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