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Off-payroll working rules from April 2020

The government will be reforming the operation of the off-payroll working rules from April 2020. The reforms which were successfully introduced into the public sector in 2017 will be extended to all sectors, making medium and large organisations and agencies responsible for ensuring the contractors they engage pay the right tax and NICs. The consultation on this reform ran from 5 March to 28 May 2019. Draft legislation, an explanatory note and a summary consultation response document were published on 11 July 2019 and can be found here. Comments are asked for via email by 5 September 2019.

Businesses can prepare for reform by:

Identifying and reviewing their current engagements with intermediaries, including personal service companies and agencies that supply labour to them;Reviewing their current arrangements for using contingent labour, particularly within the organisation functions that are more likely to engage off-payroll workers;Putting in place comprehensive, joined-up processes, for example assessing roles from a procurement, HR, tax and line management perspective, to ensure consistent decisions about the employment status of the people they engage; andReviewing internal systems, such as payroll software, process maps, HR and on-boarding policies to see if they need to make any changes.

HMRC will also provide organisations with education, guidance and support to make sure they have the tools to make the right determination. Online guidance will be available from late summer 2019. A series of education events are planned including webinars, workshops and one to one engagement with the largest employers.

HMRC is currently working with stakeholders to enhance the Check Employment Status for Tax (CEST) tool, including improvements to clarity and accessibility and additional guidance to make it easier for customers to use. There will also be more questions to cover a wider range of working practices. HMRC will continue to stand by the results of the existing service where it has been used in accordance with its guidance.


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