Assessments The majority of public bodies conducted case by case assessments on existing (central bodies: 91%, sites: 87%) and new contracts (central bodies: 93%, sites: 89%). This is considered a suitable approach by HMRC. In a few cases, where public bodies had high volumes of contractors working in the same role and under the same terms and conditions, the same assessment result was applied to all existing and future off-payroll contractors working under those same conditions. This approach is considered by HMRC to be compliant. Sources of advice and guidance The majority of respondents (central bodies: 91%, sites: 79%) had used CEST since the reforms came into effect. It was the most commonly used source of information, advice or guidance among public bodies. Whilst some public bodies reported qualitatively that late availability of CEST was problematic at the time, and initially encountered issues with inconclusive assessments and inconsistent outcomes, most agreed that it was now ensuring employment status decisions were more straightforward. Disputes The research also explored the extent to which off-payroll working reforms led to disputes with contractors or agencies, as it was expected that some off-payroll contractors would perceive the reforms to affect their take home pay and therefore show some resistance to the changes. At least half of public bodies had not had disputes with contractors or agencies about the outcome of contractor assessments (central bodies: 51%, sites: 68%). 46% of central bodies and 31% of sites reported having disputes with contractors or agencies about assessments. Amongst those that had disputes, most of these concerned contractors being assessed to fall within the off-payroll working rules (central bodies: 62%, sites: 67%). Staff workloads Six in ten central bodies (60%) and sites (59%) reported that staff had spent more time on the administration of off- payroll contractors since the reforms. Qualitative evidence showed that time was needed to understand the reforms, disseminate information to staff and implement systems to manage the changes. Conducting assessments required time and resource in the lead up to the reform, although this reduced once the initial block of assessments had been conducted. A few public bodies had reallocated work to existing staff in cases where contractors had left because of the reforms and were struggling to fill the vacancies, though generally this was uncommon. Set up costs and administrative costs On average, central bodies spent £7,550 setting up the systems and processes required to implement the reforms. Sites spent an average of £3,250. Around half of sites (52%) and central bodies (56%) experienced either no change (37% and 44% respectively) or a decrease (15% and 13% respectively) in relation to the ongoing administration costs of off-payroll contractors between Q4 2016/17 and Q1 2017/18, while around four in ten central bodies (44%) and sites (41%) reported an increase. The mean average change in costs was an increase of £50 for central bodies (median: £250) and £1,600 for sites (median: £250). In qualitative interviews, some public bodies said that they expected the administrative costs associated with the reforms to off-payroll working to decrease over time. These public bodies had incurred costs in assessing existing off- payroll contractors and dealing with disputes. However, going forward the volume of work required from staff was anticipated to be much lower.
CIPP comment Listen to a short webcast to find out what options are being considered in the consultation on how to tackle non- compliance with the off-payroll working rules in the private sector.
The Policy team will also be publishing a survey in due course to gather your views and experience to help inform our response.
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The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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