• 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.
The Government is seeking feedback from experts and stakeholders on the draft legislation for inclusion in Finance Bill 2019. HMRC will also begin roll out of its education and support package over the summer.
Further information
• CIPP half day training course on Employment status and modern employment practices • CIPP webcast on off-payroll working in the private sector from April 2020 • More detailed IR35 guidance can be found in the Business Tax section of GOV.UK. • HM Treasury updated Factsheet
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Off-payroll working flag aims to reduce unnecessary prompts 2 August 2019
The PAYE project update for 2020-21 includes the welcome news that Payroll Software will be required to include an indicator that when used, will ensure that an off-payroll worker is identified to HMRC.
Some payroll software will already include an indicator to ensure that their clients experience of using the software is improved, however this indicator doesn’t currently update HMRC as HMRC systems would not identify it.
From April 2020 the indicator will ensure that HMRC no longer issues unnecessary employer prompts when student loan deductions are not made to the off-payroll worker pay. Off-payroll working reforms affect Income Tax and NICs only, no other element of pay is affected.
Summary of tax year 20-21 projects for software developers provides full details together with a summary of other changes due for the 2020-21 tax year.
CIPP comment This is a welcome and long overdue improvement which we hope will go a long way to reduce unnecessary burden for organisations who employer the services of an individual who is in repayment of Student Loans.
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Off-payroll working from April 2020 – new guidance 27 August 2019
A number of new guides and revised guides have been published to help educate and support organisations through the extended reform of the off-payroll working rules to all sectors from April 2020.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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