Consultation – Off-payroll working from April 2020

At Budget 2018, the government confirmed the extension of reform to the off-payroll working rules (commonly known as IR35) in the private sector. The government is now consulting on the detailed design of the reform from April 2020.

The rules ensure individuals who work like employees pay broadly the same employment taxes as directly engaged employees, even where they work through their own personal service company.

The extended reform increases compliance with existing rules in the private sector. The reform will make businesses responsible for assessing an individual’s employment status and determining whether the rules apply. The responsibility for deducting any tax and NICs due will fall to the organisation, agency or other third party paying that individual’s personal service company.

The change will only apply to large and medium-sized organisations and will bring these organisations in line with public sector bodies and agencies who are already responsible for determining whether the off-payroll rules apply to engagements.

HMRC has now published a consultation into the detailed operation of the reform which can be found on gov.uk and they welcome responses from external stakeholders to the consultation https://www.gov.uk/government/consultations/off-payroll-working-rules-from-april-2020.   

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