tax rules may influence the new Crown Commercial Services (CCS) contractor terms and conditions contractor rates are rising as a result of the reform the ‘outsourced service exemption’ is unclear and would be exploited in a potential private sector roll out; clearer guidance on the off-payroll working accounting procedures would be beneficial.
This meeting of the forum took place on 11 December 2017; the full detail of the minutes can be viewed on GOV.UK .
Background to the Forum The IR35 Forum is a group of external stakeholders who meet regularly with HM Revenue and Customs (HMRC). It was established following the government’s commitment at Budget 2011 to make clear improvements to the way IR35 is administered. This followed the publication of the Office of Tax Simplification’s review of Small Business Tax. The members of the IR35 Forum include taxpayer representatives and professional advisers with expert knowledge and experience of how the legislation operates in practice and how it affects key taxpayer groups. The IR35 Forum meets quarterly.
CIPP comment The next IR35 meeting takes place on 21 February which Samantha Mann, senior policy & research officer will be attending. If you have anything you would like raised at the forum, please email policy using IR35 as the subject.
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Off-payroll Rules (Public Sector): Fee payer responsibilities 22 February 2018
The intermediaries’ legislation (commonly known as ‘IR35’) ensures that individuals who work through their own company pay employment taxes in a similar way to employees, where they would be employed were it not for the personal service company (PSC) or other intermediary that they work through. New rules, introduced in April 2017 for Public Sector engagements, moves responsibility for deciding if the off-payroll rules for engagements apply from an individual worker’s intermediary to the public authority. The measure makes the public authority responsible for deciding if employment taxes and NICs should be deducted from the gross payment due to the PSC. Normally, the public authority will be the fee payer. However, where there is a further intermediary, or intermediaries, within the payment chain (positioned between the end client (the public authority) and the PSC), they will then become the ‘fee payer’ (‘fee payer’ making the actual payment to the PSC). Where there is this further intermediary who becomes the fee payer, there is no scope for this further intermediary to disregard the decision provided by the public authority end engager. The fee payer should deduct employment taxes and NICs in accordance with the public authority view. For example, if a PSC provides a service to a public authority through a further intermediary (such as an umbrella company), and the public authority has provided a view that the IR35 legislation applies to that engagement, the umbrella company must apply deductions to the gross payment. The umbrella company (or similar intermediary) should not provide any alternative view that will remove the requirement for tax and NIC deduction to be applied. The fee payer must be registered with HMRC as an employer and report payments and deductions via a ‘full Payment Submission’, further guidance can be found here .
This information was published in the February edition of the Employer Bulletin
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The Chartered Institute of Payroll Professionals
Policy News Journal
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