It was announced on Monday by the chancellor that the planned repeal of the off payroll working rules is not going ahead. This means that organisations subject to the rules must continue to apply the off payroll working rules beyond April 2023. Whilst organisations will no longer experience the immediate disruption caused by transitioning to a new IR35 regime, it does mean organisations subject to the rules will have a long term obligation to comply with the onerous and complex off payroll working rules. As a brief refresher, the main obligations under the off payroll working rules are as follows
- Determine the employment status of every worker who operates through their own intermediary, even if they are provided through an agency.
- Organisations must communicate their determination using a status determination statement and ensure there is a process in place to deal with any disputed status determinations from contractors.
- If the client organisation is also the fee-payer and the worker is determined to be an employee for tax purposes following the status determination, the organisation must deduct and pay tax and national insurance contributions to HMRC in their payroll.
It is hoped that the government will commit to review these existing off payroll working rules to make it easier for organisations to comply with the rules and alleviate the risk of getting status determination wrong. In the meantime, organisations must ensure they are applying the rules correctly to minimise exposure to penalties and reputational risk.
Moore Kingston Smith’s off-payroll working experts help businesses understand their potential risks. They work alongside you to design a strategy that helps mitigate risks. If you would like to discuss your current situation and hear more about how Moore Kingston Smith can help, please contact their team – Tim Stovold, Head of Tax email: firstname.lastname@example.org or John Williams, Tax Director, email email@example.com