Small companies are out with the scope of the reform and the government intends to use the existing statutory definition within the Companies Act (s.382) to determine whether or not a corporate client is small.
The Companies Act definition states that the qualifying conditions are met by a company in a year in which it satisfies two or more of the following requirements:
1. Annual Turnover - not more than £10.2 million 2. Balance sheet total - not more than £5.1 million 3. Number of employees - not more than 50.
This stage of consultation will close on 28 May 2019.
CIPP comment In addition to surveying payroll professionals in the coming weeks on this next stage of consultation, the CIPP pol icy team will also look to hold a think tank roundtable event to discuss the details of implementation. Invites will be sent out to Full, Fellow and Chartered members in due course but in the interim if you would like to lodge your interest to attend this event please email us using ‘off-payroll private sector’ in the subject box.
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Prepare for changes to the off-payroll working rules (IR35) 17 April 2019
HMRC have published new guidance which aims to help organisations prepare for off-payrolling working within the private sector.
Off-payroll reforms were first delivered in the public sector in April 2017, these latest reforms will see them being rolled out to medium and large business as from April 2020. Any changes that are introduced as a result of the recent consultation will also impact public sector organisations.
The guidance suggest that organisations start to prepare now by:
How to prepare: • Look at your current workforce (including those engaged through agencies and other intermediaries) to identify those individuals who are supplying their services through PSCs. • Determine if the off-payroll rules apply for any contracts that will extend beyond April 2020. The HMRC Check Employment Status for Tax service can be used to do this. • Start talking to contractors about whether the off-payroll rules will apply to their role. • Put processes in place to determine if the off-payroll rules apply to future engagements which might include considering who within the organisation should make a determination and how payments will be made to contractors who are considered to fall within the off-payroll rules.
More detailed IR35 guidance can be found in the Business Tax section of Gov.UK
CIPP comment The CIPP is disappointed that HMRC has issued its preliminary guidance more than a month before the government consultation looking at the scope of the reforms, along with the impact on non-corporate engagers has closed.
We can only remain hopeful that this preliminary guidance is simply a starting point in raising awareness of the rule changes amongst the private sector and is not in any way pre-judging the outcome of the consultation.
The CIPP’s policy team has produced a survey based on the consultation document and this will be issued within the next few days. We would encourage all members working in the private sector to set aside time to complete this survey once it is published. The policy team will be holding a think tank roundtable in Manchester in May, invitations will be sent to all full, fellow and chartered members. Please check your preferences to ensure that you are able to
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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