Off-payroll working flag aims to reduce unnecessary prompts

01 August 2019

The PAYE project update for 2020-21 includes the welcome news that Payroll Software will be required to include an indicator that when used, will ensure that an off-payroll worker is identified to HMRC.


Some payroll software will already include an indicator to ensure that their client's experience of using the software is improved, however, this indicator doesn’t currently update HMRC as HMRC systems would not identify it.


From April 2020 the indicator will ensure that HMRC no longer issues unnecessary employer prompts when student loan deductions are not made to the off-payroll worker pay. Off-payroll working reforms affect Income Tax and NICs only, no other element of pay is affected.


Summary of tax year 20-21 projects for software developers provides full details together with a summary of other changes due for the 2020-21 tax year.



CIPP comment


This is a welcome and long-overdue improvement which we hope will go a long way to reduce unnecessary burden for organisations who employ the services of an individual who is in repayment of Student Loans.