COMPLIANCE
Off-payroll working
This issue, the CIPP’s policy and research team covers the intricacies of off-payroll working
T he off-payroll working rules were implemented for medium and large-sized businesses in the private sector from 6 April 2021. Almost nine months on, the magazine’s theme of communication highlights this imperative element to ensure organisations are successfully adhering to the off-payroll working rules. See some of the key facts below: In a nutshell… ● off-payroll working was implemented in the public sector in April 2017 ● off-payroll working rules don’t currently apply to private sector organisations classed as being small ● hiring organisations and end-clients will now have the responsibility for deciding whether off-payroll working rules should apply to anyone who is engaged via a personal service company (PSC). This used to be the PSC’s decision, and still is for small organisations within the private sector
confirmations to their workers regarding their size, unless they are specifically asked by a worker or the organisation / person they contract with. Check employment status for tax (CEST) tool ● the CEST tool provides Her Majesty’s Revenue and Customs’ (HMRC’s) view of a worker’s employment status, based on the information provided ● HMRC will stand by determinations given by the tool, as long as the information given is accurate ● before using the tool, you will need to know the following for the tool to correctly establish employment status: ❍ details of the contract ❍ the worker’s responsibilities ❍ who decides what work needs to be done ❍ who decides when, where and how the work is done ❍ how the worker will be paid ❍ if the engagement includes any corporate benefits or reimbursement for expenses. ● the CEST tool can be accessed here: http://ow.ly/uSyA30s9VCx, and any results should be saved and printed. n We want to hear from you! How have the changes to the off-payroll working rules impacted you, if at all? Do you have any tips you would like to share? Let us know, at policy@cipp.org.uk .
● where engagements fall within off-payroll working rules, pay as you earn (PAYE) and National Insurance contributions (NICs) will need to be deducted by the fee-payer on ‘deemed’ employment payments ● the fee-payer is not necessarily the same organisation as the end-client, especially in more complex supply chains. Status determination statements (SDS) ● a SDS is used to communicate the employment status of a worker who operates through their own intermediary ● the SDS must be passed to both the worker and the fee-payer (if separate to the end-client) ● the SDS must explain the conclusion and the reasons for that conclusion ● impacted organisations must have a status determination dispute process in place ● small organisations don’t need to make
Jargon-buster
What’s a ‘small’ organisation? ● An organisation is classed as being small if it meets at least two of the following for two consecutive financial years: ❍ it has a turnover of no more than £10.2 million ❍ it has a balance sheet total of no more than £5.1 million ❍ it has no more than 50 employees (averaged over the financial year). What is a PSC? An intermediary or PSC allows workers to provide employment services through the medium of a limited company.
Want to learn more? The CIPP offers a training course on off-payroll working and other employment status considerations. The course explains how to assess employment status, the financial risk of getting it wrong, and a variety of modern employment practices. It also covers the off- payroll working reforms. Book today, at: http://ow.ly/NiLq30s9oRk .
| Professional in Payroll, Pensions and Reward | March 2022 | Issue 78 16
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