Extension to off payroll working rules

Before words like ‘coronavirus’, ‘pandemic’ and ‘social-distancing’ became part of our daily vocabulary, a topic high on the agenda was IR35 and the off-payroll working rules. In the Autumn 2018 Budget, the Government confirmed that the off-payroll working rules would be extended to the private sector from 6 April 2020. In response to the pandemic, these new measures were postponed until 6 April 2021.

An extension to the off-payroll working rules will mean that payments to workers supplied to large and medium-sized companies by personal service companies could be treated as payments of employment income. This means they will be subject to income tax and NICs, and responsibility for tax compliance therefore shifts from the personal-service company to the client or intermediary.

Employers with consultants on their books employed via a personal-service company should review their arrangements to ensure they don’t fall foul of the rules from 6 April. We have already helped a number of our clients to review and make changes to their current arrangements, and can help you get to grips with IR35 and the off-payroll working rules. Please do contact the employment team if you require assistance.