News added on 24.01.2020

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Draft legislation on the reform of off-payroll working rules published

HMRC has published draft secondary legislation for technical comment, despite the government’s ongoing review of the new rules. What’s the impact?

Recap. The off-payroll working rules can apply if a worker provides their services through an intermediary, such as a company, when they would otherwise be taxed as an employee. From April 2020 it will be large and medium sized private sector organisations’ responsibility to determine whether a contractor is employed or self-employed for tax purposes and deduct PAYE where necessary. HMRC will be able to recover the tax and NI from different companies in a supply chain.

Draft rules. Responding to criticism, the government launched a review of the rules to make sure that the implementation of the changes in April is as smooth as possible. Draft secondary legislation is also now open for consultation until 19 February. This gives the government very limited time to act on the results and help businesses understand their obligations before April 2020.

Concerns. There have been many public sector cases which show how complex the existing legislation is, and how easy it is to reach the incorrect employment status. With just two months to go, the final legislation and guidance on the new rules is not ready. Businesses will have very little time to fine tune their processes before the rules take effect.

You can participate in the consultation here before 19 February 2020.

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