HM Revenue and Customs (HMRC) have published new guides to improve understanding of responsibilities when there are contractors in a labour supply chain.
The new Guidelines for Compliance will help organisations
understand what HMRC consider good practice (or poor practice)
when preparing for and making status determinations for
off-payroll workers. You can find the full guidance at
‘Help to comply with the reformed off-payroll working rules (IR35)’.
Off-payroll working legislation is contained in Chapter 8 and Chapter 10, Part 2 Income Tax (Earnings and Pensions) Act 2003 (ITEPA), and the Social Security Contributions (Intermediaries) Regulations 2000.
These guidelines are for organisations who fall within the scope of the reformed off-payroll working rules, introduced in 2017 and 2021 (contained in Chapter 10).
The guidelines are primarily for deemed employers who:
- are responsible for operating the off-payroll working rules
- engage workers who provide their services through their own intermediary, for example their own:
- limited company
- personal service company
- partnership
The guidelines will also be helpful to:
- agencies in the supply chain
- professional bodies that represent and advise clients who are required to operate these rules
They have been developed to help organisations understand what HMRC considers good practice, including:
- preparing for and making status determinations for off-payroll workers
- working with others in the supply chain, to ensure all workers that provide their services through an intermediary are correctly identified and considered under the off-payroll working rules
- working with others in the supply chain to gain assurance that income tax and National Insurance contributions are being deducted by the correct operation of PAYE, when off-payroll workers are deemed to be employed
The guidelines also contain examples of good systems and processes that will help to reduce the risk of error when determining a worker’s status for tax. These include different scenarios and different organisational structures that may be caught by the off-payroll working rules.
Help to comply with the reformed off-payroll working rules (IR35).
PAYadvice.UK Resources: Off-Payroll workers – IR35 – Deemed Employees
PAYadvice.UK 4/12/2023