Prepare for changes to off-payroll working rules, says HMRC

From April 2020 the rules for engaging individuals through personal service companies (PSCs) are changing. The responsibility for determining whether the off-payroll working rules apply will move to the organisation receiving an individual’s services.

The HMRC's advice is aimed to help organisations prepare before the changes come in.

How to prepare

1. Look at your current workforce (including those engaged through agencies and other intermediaries) to identify those individuals who are supplying their services through PSCs.

2. Determine if the off-payroll rules apply for any contracts that will extend beyond April 2020. You can use HMRC’s Check Employment Status for Tax service to do this.

3. Start talking to your contractors about whether the off-payroll rules apply to their role.

4. Put processes in place to determine if the off-payroll rules apply to future engagements. These might include who in your organisation should make a determination and how payments will be made to contractors within the off-payroll rules.

More information on the eligibility and details of the reform is in the consultation Off-payroll working rules from April 2020 on GOV.UK.

Consultations still open 

The HMRC is also currently asking for views on the extension of the rules to the private sector. 

According to HMRC, the aim of the consultation, which closes on 28 May, is to ensure the proposed processes are suitable for the large and diverse sectors in which the new rules will need to be operated. 

The consultation asks for views and information on several subjects, including:

• the scope of the reform and impact on non-corporate engagers;
• information requirements for engagers, fee-payers and personal service companies; and
• addressing status determination disagreements.

The consultation also sets out how businesses can prepare for reform, and sets out HMRC's plans to provide education and support for businesses that will be in scope of the changes.