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Moore Kingston Smith : Off-payroll working: what you need to know following the cancellation of the rules

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In the government’s “mini-Budget” it was announced that the off-payroll working rules are to be cancelled.

These rules were introduced in 2017 for public sector organisations and in 2021 for medium and large private sector organisations. Organisations subject to the rules are responsible for determining if an engagement contract falls inside or outside of IR35, i.e. determining the employment status of contractors that provide services to them through personal service companies and – if these contractors are working as if they were employees – for ensuring PAYE and NICs are accounted for on this basis.

From 6 April 2023, this IR35 obligation will move away from end-users of contractor services and back to the contractor’s personal services company, i.e. a return to the “old” IR35 rules.

Putting aside the considerable cost and time invested by many organisations to set up systems and processes to comply with the off-payroll working rules, this announcement will be welcome news for organisations that rely on a contractor workforce, for whom the rules have presented a significant challenge over the past few years. However, organisations still have plenty to consider when engaging with contractors and should understand how they will be impacted by these changes.

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