Preparing for changes to the off-payroll working rules (IR35) on 6 April 2021

There are less than 100 days until changes to the off-payroll working rules (IR35) come into effect on 6 April 2021.

HMRC are providing support to help customers continue to prepare for the changes.

Those who should take action are:

  • large and medium-sized non-public sector organisations who engage contractors who work through their own limited company or other intermediary 
  •  employment agencies who supply such contractors  

Contractors also need to be aware that way they pay tax may change in April. We have published an updated factsheet to help them.

HMRC is delivering an education and support programme, and working with stakeholders, industry and contractors to help them prepare for the reform. Their plans include:

  • Updated publication about the HMRC approach to helping compliance with the rules and tackle those who seek not to, once the reform is in effect from 6 April
  • Media and social media activity
  • Further publication of data showing the decisions given by the Check Employment Status for Tax (CEST) tool to help build confidence in the tool.
  • Continuing a programme of workshops and webinars, including external events
  • Further articles in the HMRC Employer Bulletin and Agent Update publications.
  • Continuing to enhance the information published on GOV.UK.

And what about payroll service?

Are you ready for off payroll workers?

Under the new rules certain contractors details will need to be captured and applied on the engagers (employers) PAYE payroll.

Whether that is a special separate PAYE reference or mixed with the standard PAYE scheme for employees.

Pay elements that are:

  • Subject to Tax and National Insurance for fees being paid
  • Not subject to tax nor National Insurance for expense elements of invoices along with VAT

.. May be needed to be added.

For each individual a special Full Payment Submisdion (FPS) market is required to be applied where applicable.

Is your payroll prepared and ready to process off-payroll workers (deemed employees).

PAYadvice.UK 14/1/2021 updated 15/1/2021

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