Today, HMRC have updated their guidance on off-payroll working for clients. Some rules already apply to all public sector clients, but from 6 April 2021 medium and large-sized private sector clients also need to apply them. The private sector includes third sector organisations, such as some charities.
- Who the rules apply to
- When you need to start applying the rules
- What you need to do as a client
- What to do if a worker or deemed employer disagrees with your determination
What you need to do as a client
You’ll need to decide the employment status of:
- every worker you engage through their intermediary
- every worker you engage through an agency
The determination should be communicated using a Status Determination Statement (SDS).
An SDS must:
- be passed to the worker and the person or organisation you contract with
- give your conclusion and the reasons for coming to it
Reasonable care must be taken when making a determination. You can issue an SDS before 6 April 2021 if the rules apply.
You’ll also need to:
- make sure you keep detailed records of your employment status determinations, including the reasons for the determination and fees paid
- have processes in place to deal with any disagreements that arise from your determination
- confirm the size of your organisation if asked by the person or organisation you contract with, or the worker
If you are also the fee-payer and the off-payroll working rules apply, you will need to deduct and pay tax and National Insurance contributions to HMRC.
Published: 30 November 2020