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ISSUE 1
To recap the terms “IR35” and “off-payroll working” are often used interchangeably as they both pertain to the legislation that dictates the tax treatment of a worker’s services provided through an intermediary. However, in this context, “IR35” refers to the original rules introduced in April 2000 under Chapter 8 of Part 2 of ITEPA 2003, while “off-payroll working rules” refer to the rules under Chapter 10 of Part 2 of ITEPA 2003 introduced in April 2017 for public authorities and in April 2021 for private sector entities. Off-payroll working: What’s changed?
Author: Susan Ball | RSM UK
Small private sector end clients, as defined by the Companies Act 2006, are exempt from these requirements. For group companies, the small company test applies to the parent company, not any subsidiaries. If services are provided to a subsidiary company, but the parent company is a medium or large organisation, the new IR35 rules will apply to its subsidiaries. If the end client is a medium or large organisation that engages a worker via an intermediary on a temporary basis, it will need to determine (providing reasons for its decision) whether
From 6 April 2017, the amended off- payroll working (OPW) rules made public sector organisations who are ‘end-clients’, responsible for determining if a worker would have been considered an employee for tax purposes if engaged directly. From 6 April 2021, the OPW rules were extended to medium and large organisations in the private sector who are end-clients and who were, from that date, also tasked with assessing the employment status of the contractors they engage.
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