Where it is determined that the rules do apply, the business, agency, or third party paying the worker’s company will need to deduct income tax and employee NICs and pay employer NICs.
Check Employment Status for Tax (CEST) service
HMRC developed the CEST to help businesses determine whether the off-payroll working rules apply. HMRC will continue to work with stakeholders to improve further the CEST service and guidance before the reform comes into effect. HMRC continues to work with stakeholders to identify improvements to CEST and wider guidance to ensure it meets the needs of the private sector - enhancements will be tested with stakeholders, operational and legal experts before the reform is implemented.
HMRC assurance
The reform is not retrospective and as it has in the public sector HMRC will focus its efforts on ensuring businesses comply with the reform rather than focusing on historic cases.
HMRC will not carry out targeted campaigns into previous years when individuals start paying employment taxes under IR35 for the first time following the reform and businesses’ decisions about whether their workers are within the rules will not automatically trigger an enquiry into earlier years.
The reform will not stop anyone working through a company if that suits them, and does not apply to the self-employed
The future
The government will continue to monitor tax receipts as data becomes available
A further consultation on the detailed operation of the reform will be published in the coming months. This consultation will inform the draft Finance Bill legislation, which is expected to be published in Summer 2019.
Geographical extent
CIPP comment
The next meeting of the HMRC IR35 forum is scheduled for the 21 November 2018. Please email CIPP senior policy and research officer Samantha Mann at policy@cipp.org.uk with any comments or concerns that you wish to share on your experience with off-payroll working reforms.
Thank you
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Off-payroll working in the private sector 29 January 2019
Intermediaries legislation (commonly referred to as IR35) was introduced in 2000 as a method of subjecting the pay of individuals to PAYE Income Tax and Class 1 NIC who would, if not for the intermediary they were working through, be employees. The responsibility for assessing each contract of work lay with the individual working through the intermediary. An Intermediary could be the Personal Service Company (PSC) of the individual delivering the work, but could also be, another person or a partnership – the key issue being that they would be an employee if they were not working through an intermediary.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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