Consultation on off-payroll working rules in private sector from April 2020

05 March 2019


The next stage of consultation has been published on how best to implement the reform to the off-payroll working rules for engagements in the private sector.


Following the announced that the reform to the off-payroll working rules introduced for engagements in the public sector in April 2017 will be extended to the private sector from 6 April 2020, HMRC published a consultation in May 2018 seeking views on how best to address non-compliance with the off-payroll working rules in the private sector. The CIPP ran a joint survey with the CIPD – our consultation response was published in August 2018. The government published a summary of all its responses and a fact sheet in October 2018.


The reform means that from April 2020, where an individual is engaged by a medium or large-sized business and works through an intermediary, the engaging business will become responsible for assessing the individual’s employment status. If the rules apply, the business, agency or third party paying the individual’s company will be responsible for deducting income tax and NICs through PAYE, as for employees, and paying employer NICs.


This next stage of consultation seeks to ensure the proposed processes are suitable for the large and diverse private sector as well as engagers in the public sector already applying the rules. The consultation asks for views and information on a number of subjects, including:


  • the scope of the reform and impact on non-corporate engagers

  • information requirements for engagers, fee-payers and personal service companies

  • addressing status determination disagreements.


The government understands that many organisations will be keen to begin preparations and has therefore included in the education and support section of the consultation actions that affected organisations can take now to prepare for the reform.


Small companies are out with the scope of the reform and the government intends to use the existing statutory definition within the Companies Act (s.382) to determine whether or not a corporate client is small.


The Companies Act definition states that the qualifying conditions are met by a company in a year in which it satisfies two or more of the following requirements:


  1. Annual Turnover - not more than £10.2 million

  2. Balance sheet total - not more than £5.1 million

  3. Number of employees - not more than 50.


This stage of consultation will close on 28 May 2019.


CIPP comment

In addition to surveying payroll professionals in the coming weeks on this next stage of consultation, the CIPP policy team will also look to hold a think tank roundtable event to discuss the details of implementation. Invites will be sent out to Full, Fellow and Chartered members in due course but in the interim, if you would like to lodge your interest to attend this event please email us using ‘off-payroll private sector’ in the subject box.