Off-payroll working reforms: impacts on education sites and employment agencies

23 March 2021

The changes to off-payroll working rules were initially introduced in public sector organisations back in April 2017. HMRC has recently released research relating to the effects of those reforms on education sites and on employment agencies, ahead of the roll-out of the changes to medium and large employers in the private sector from 6 April 2021.

Both reports form part of more extensive research into the impacts of the reforms on public sector organisations, and further work in this area is scheduled. In particular, investigations into the effects of the reforms within the NHS have been stalled to allow it to focus on responding to the outbreak of coronavirus.

The research relating to the impacts on education sites is made up of 51 quantitative interviews and six qualitative interviews. The conclusion of the report is that the reforms did not have any substantial effects on the education sites over the longer term, and that no other major problems emerged as a result of the reforms.  However, the qualitative data that was collected suggested that a portion of education sites still felt as if they didn’t fully understand the off-payroll working rules, and were anxious about the potential consequences of making incorrect status determinations. Some confirmed that guidance on the topic needed to be clearer, and that the Check Employment Status for Tax (CEST) tool had its limitations, particularly where it provided inconclusive outcomes, combined with a lack of information regarding the next steps to take in these scenarios.

The report that focuses on employment agencies investigates the impacts of the reform in 2017 and also on the 2021 reform, and consists of information collected through 34 qualitative interviews. The research investigated the impacts of the 2017 reform on employment agencies to establish how contractors may have been affected, and also considered what additional support agencies may require from HMRC prior to the changes that will be implemented from 6 April 2021 in the private sector. Additionally, the research looks at the preliminary impacts of the 2021 reform.


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