A technical error in the definition of ‘public authority’ unintentionally brings some private sector businesses within the scope of the off-payroll working in the public sector measure.
One of the measures that the shortened ‘rushed through’ Finance Act 2017 retained, is off-payroll working in the public sector - reform of the intermediaries legislation
An amendment has been made to ‘Schedule 1 - Workers’ services provided to public sector through intermediaries’. Private sector retail businesses including high street pharmacies and opticians would have inadvertently been within the scope of the off-payroll working in the public sector measure because they provide services on behalf of the National Health Service (NHS). Such businesses would have been required to consider whether the new rules applied to all contractors working for them through an intermediary. This was not the intention of this policy so the meaning of ‘public authority’ has been changed. New section 61L is amended to replace the definition of “public authority” to take these retail businesses out of the scope of the FOIA 2000 and FOISA 2002 definitions. The amendments reflect new provisions to be inserted into the Income Tax (Earnings and Pensions) Act 2003 (ITEPA). The amendment retains the need for NHS hospitals to consider whether to apply the off-payroll working in the public sector rules to all contractors working for them through an intermediary. This includes contractors, who are providing ophthalmic and pharmaceutical services, (again, where they are working through an intermediary). The definition of ‘public authority’ continues to include general practitioner surgeries and dental practices or surgeries providing NHS medical and dental services.
The changes apply retrospectively and have effect from 6 April 2017.
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Businesses that provide ophthalmic and pharmaceutical services 11 May 2017
Retail businesses providing ophthalmic and pharmaceutical services for the NHS will not need to consider whether to apply the off-payroll working in the public sector rules to contractors working for them through an intermediary.
We recently published a news item regarding a technical error in the definition of ‘public authority’ in the off-payroll regulations which unintentionally brought some private sector businesses within the scope of the off-payroll working in the public sector measure.
Guidance has now been updated to reflect the exemption:
Businesses that provide ophthalmic and pharmaceutical services
The definition of public authority retains the need for NHS hospitals to consider whether to apply the off-payroll working in the public sector rules to all contractors working for them through an intermediary. This includes contractors who are providing ophthalmic and pharmaceutical services through an intermediary. The definition of public authority includes General Practitioner (GP) surgeries and dental practices or surgeries providing NHS medical and dental services. These entities are required to consider whether the off-payroll working in the public sector rules should be applied to contractors working for them through an intermediary.
Follow this link for further guidance on off-payroll working in the public sector: reform of intermediaries legislation .
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NHS revise IR35 guidance for off-payroll staff 5 June 2017
Revised guidance from the NHS says not to assume that all agency staff will fall inside IR35; each case should be assessed individually as to whether or not the reformed intermediaries legislation apples.
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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