CIPP poll on off-payroll working in the public sector

26 April 2016

The Government announced at Budget 2016 that from April 2017, individuals working through their own company in the public sector will no longer be responsible for deciding whether the intermediaries legislation will apply. This responsibility will instead move to the public sector employer, agency, or third party that pays the worker’s intermediary. In the event that the employer, agency or third party decides that the rules apply to a contract they will be required to account for and pay the liabilities through the Real Time Information (RTI) system and deduct the relevant tax and NICs.

Further to this announcement a technical note was published which provides further details on the changes that are being proposed. The note gives not only an overview of the changes but also further technical details and the next steps.

It is the intention of HMRC to provide help for public sector employers and agencies with their new responsibilities by introducing clear, objective tests for employers to use to decide at the point of hire whether or not they will need to consider the new rules and to clearly identify engagements that are caught by the rules. For cases that are less clear cut, HMRC aim to develop a digital tool to provide employers who are engaging an incorporated worker with a real-time HMRC view on whether or not the intermediaries rules need to be applied.

HMRC will be designing these new tools and tests in consultation with stakeholders. Legislation will be introduced in Finance Bill 2017 and will also be subject to full consultation.

Please take a moment to complete our CIPP Poll on our home page (bottom right) which asks:

From April 2017 responsibility for deciding whether intermediaries legislation will apply, will move from PSC to Public sector employers and their agencies/third parties. How will this impact you?