OFF PAYROLL WORKING IN THE PRIVATE SECTOR

Since 5 April 2017, people working in the public sector through intermediaries, agencies and their own companies have been subject to specific rules on “off-payroll working”.

This, coupled with IR35 legislation was designed to ensure that those working within the NHS and other public organisations essentially pay the same level of tax and NI as those employed directly by the organisation concerned.

The writing was on the wall that if successful at collecting in tax, HMRC would seek to extend the procedure into the private sector and it comes as no surprise that they have recently launched the first part of this in a consultation document.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/783409/Off-payroll_working_rules_from_April_2020.pdf

Initially this will affect medium and large private sector companies from April 2020. We believe that those companies should be starting to plan for compliance now. For small companies there seems little doubt that they will be brought into the regime soon afterwards so we suggest that they may need to consider their strategies going forward and the possible adverse cash flow effects.