The off-payroll working rules (IR35), which apply where workers are engaged through personal service companies (PSCs), will change from 6 April 2020. The reforms will move responsibility for determining whether the off-payroll working rules apply from the worker/their PSC to the engager organisation receiving their services.
HMRC has now provided the following advice to help your organisation prepare for the changes:
- Look at your current workforce, including those engaged through agencies and other intermediaries, to identify those individuals who are supplying their services through PSCs.
- Determine if the off-payroll rules apply for any contracts that will extend beyond April 2020 – you can use HMRC’s Check Employment Status for Tax (CEST) service to do this.
Start talking to your contractors about whether the off-payroll rules apply to their role.
Put processes in place to determine if the off-payroll rules apply to future engagements – these might include who in your organisation should make a determination and how payments will be made to contractors within the off-payroll rules.