[UK] Off-Payroll Draft Legislation Published

 IR35 / off payroll is happening from the 6^th of April 2020!

On the 22^nd of January 2020, HMRC published two pieces of legislation for consultation, open until the 19^th of February 2020:

1. The Income Tax (Pay As You Earn) (Amendment) Regulations 2020
2. The Social Security Contributions (Intermediaries) (Miscellaneous Amendments) Regulations 2020

The main legislation that will allow the collection of tax, NICs and Apprenticeship levy through the payroll will be the Finance Act 2020.  This will state that a “deemed employer” is required to collect tax, NICs and apprenticeship levy from a “deemed employee” and send this to HMRC. 

The technical note that was published along with the above legislation explains that where this doesn’t happen, provisions are made to allow for the recovery of PAYE Income Tax liabilities from a third party (where a deemed employer has failed to make PAYE tax deductions).  The draft regulations also amend the PAYE regulations to provide for the reporting of an off-payroll worker indicator on PAYE Real Time Information (RTI) returns.

The NICs legislation makes similar provisions for National Insurance.

 Global Payroll Association Comment

Many engagers will have concerns about the operation of off-payroll working from the 6^th of April 2020.  We recommend reading and commenting on the draft legislation.

Also, we would like to draw your attention to the comprehensive coverage that we are giving this subject at the GPA’s 2020 UK Summit.  This takes the form of two sessions:

1. “Surviving IR35 in the private sector”, a panel session with industry experts and
2. “IR35 lessons learned from ‘Down Under’”, a session that will update professionals on the experiences already faced with operating a similar arrangement in Australia

 IR35 / off payroll is happening from the 6^th of April 2020!

On the 22^nd of January 2020, HMRC published two pieces of legislation for consultation, open until the 19^th of February 2020:

1. The Income Tax (Pay As You Earn) (Amendment) Regulations 2020
2. The Social Security Contributions (Intermediaries) (Miscellaneous Amendments) Regulations 2020

The main legislation that will allow the collection of tax, NICs and Apprenticeship levy through the payroll will be the Finance Act 2020.  This will state that a “deemed employer” is required to collect tax, NICs and apprenticeship levy from a “deemed employee” and send this to HMRC. 

The technical note that was published along with the above legislation explains that where this doesn’t happen, provisions are made to allow for the recovery of PAYE Income Tax liabilities from a third party (where a deemed employer has failed to make PAYE tax deductions).  The draft regulations also amend the PAYE regulations to provide for the reporting of an off-payroll worker indicator on PAYE Real Time Information (RTI) returns.

The NICs legislation makes similar provisions for National Insurance.

 Global Payroll Association Comment

Many engagers will have concerns about the operation of off-payroll working from the 6^th of April 2020.  We recommend reading and commenting on the draft legislation.

Also, we would like to draw your attention to the comprehensive coverage that we are giving this subject at the GPA’s 2020 UK Summit.  This takes the form of two sessions:

1. “Surviving IR35 in the private sector”, a panel session with industry experts and
2. “IR35 lessons learned from ‘Down Under’”, a session that will update professionals on the experiences already faced with operating a similar arrangement in Australia