06 February 2022

This issue, the CIPP’s policy and research team covers  the intricacies of off-payroll working

The off-payroll working rules were implemented for medium and large-sized businesses in the private sector from 6 April 2021. Almost nine months on, the magazine’s theme of communication highlights this imperative element to ensure organisations are successfully adhering to the off-payroll working rules.

See some of the key facts below:


In a nutshell…

  • off-payroll working was implemented in the public sector in April 2017

  • off-payroll working rules don’t currently apply to private sector organisations classed as being small

  • hiring organisations and end-clients will now have the responsibility for deciding whether off-payroll working rules should apply to anyone who is engaged via a personal service company (PSC). This used to be the PSC’s decision, and is for small private sector organisations, at the present time

  • where engagements fall within off-payroll working rules, pay as you earn (PAYE) and National Insurance contributions (NICs) will need to be deducted by the fee-payer on ‘deemed’ employment payments

  • the fee-payer is not necessarily the same organisation as the end-client, especially in more complex supply chains.


Status determination statements (SDS)

  • a SDS is used to communicate the employment status of a worker who operates through their own intermediary

  • the SDS must be passed to both the worker and the fee-payer (if separate to the end-client)

  • the SDS must explain the conclusion and the reasons for that conclusion

  • impacted organisations must have a status determination dispute process in place

  • small organisations don’t need to make confirmations to their workers regarding their size, unless they are specifically asked by a worker or the organisation / person they contract with.


Check employment status for tax (CEST) tool

  • the CEST tool provides Her Majesty’s Revenue and Customs’ (HMRC’s) view of a worker’s employment status, based on the information provided

  • HMRC will stand by determinations given by the tool, as long as the information given is accurate

  • before using the tool, you will need to know the following for the tool to correctly establish employment status:

    • details of the contract

    • the worker’s responsibilities

    • who decides what work needs to be done

    • who decides when, where and how the work is done

    • how the worker will be paid

    • if the engagement includes any corporate benefits or reimbursement for expenses.

  • the CEST tool can be accessed here: http://ow.ly/uSyA30s9VCx, and any results should be saved and printed. 


Featured in the March 2022 issue of Professional in Payroll, Pensions and Reward. Correct at time of publication.