News added on 19.03.2020

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Off-payroll working reforms delayed until 2021

In an attempt to help businesses during the coronavirus pandemic, the government has delayed the introduction of off-payroll working reforms for the private sector. What do you need to know?

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. The government had planned to make it 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 from April 2020.

Delay. Despite criticism, the government announced that the reforms would be going ahead as planned at the Budget earlier this month. However, a decision has now been made to postpone the implementation until 6 April 2021, to help businesses and individuals affected by the spread of the coronavirus.

Beware. The reforms will only change who is responsible for determining the employment status of contractors, so those operating via personal service companies still need to be able to show that an employment relationship does not exist in the event of an HMRC enquiry.

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