CONSULTATION MARCH 2019 OFF-PAYROLL WORKING RULES FROM APRIL 2020
On 5th March 2019, HMRC published the consultation document ‘Off-payroll working rules from April 2020’. The consultation seeks to refine the operation of the off-payroll rules prior to implementation into the private sector from April 2020.
KEY POINTS FROM THE CONSULTATION
No groundbreaking changes were present in the consultation which will remain open to responses until 28th May 2019.
It appears that the reform will mirror that currently implemented in the public sector, with a few potential tweaks:
The rules will not apply to small businesses; HMRC have confirmed in more detail that a company will qualify as small where the company, in a year, satisfies two or more of the following requirements:
- Annual turnover not more than £10.2 million
- Balance sheet total not more than £5.1 million
- Number of employees not more than 50
Sharing of information requirements; Clients will be required to pass information of the determination to the agency, as well as directly to the contractor, and include the reasoning for that determination on request. The information is then required to cascade down the labour supply chain to the fee-payer.
This will be welcomed by contractors looking for transparency over status decisions, but may pose an increased administrative burden on clients.
Provision for the transfer of liability; HMRC has placed the onus for ensuring compliance with the rules on the first agency (i.e. the agency/intermediary closest in the labour supply chain to the client, which in most cases will also be the fee-payer).
Providing that each party or parties in the chain fulfil their responsibilities, the liability will rest with the agency or intermediary closest to the client. This is despite the fact that this party will not be the one that has made the IR35 decision. Therefore, it’s absolutely vital recruiters ensure they are able to contribute to accurate assessments.
Introduction of a “client-led disagreement process”; HMRC proposes that clients have a process for dealing with status disagreements with its off-payroll workers. There will likely be minimum requirements to this such as the consideration of evidence put forward by the worker, however the organisations will be able to tailor the process to their business processes.
CONSTRUCTION GROWTH SLOWS AS COSTS “GO THROUGH THE ROOF”
The pace of construction growth slowed in August as buyers reported near record rises in input cost inflation. The bellwether IHS Markit/CIPS UK Construction PMI Total Activ ...
SUBCONTRACTORS HIT OUT AT HMRC OVER SLOW VAT REPAYMENTS
Specialist contractors have hit out at HMRC over the time it takes to reclaim VAT payments following a controversial change in the tax regime earlier this year. The “domestic reverse charge&rd ...
LABOUR COSTS ‘BREAK RECORDS’ AS VACANCIES SOAR
Recruiters have reported “record-breaking” increases in labour costs as new data shows vacancies hitting fresh highs. Between May and July, there were 38,000 vacancies in the construction ...
TIMBER SHORTAGE DUE TO 'UNPRECEDENTED' POST-LOCKDOWN DEMAND
The price of timber has risen sharply with builders struggling to get supplies, as post-lockdown construction and DIY projects create huge demand. The Timber Trade Federation (TTF) said supplier ...
UK CONSTRUCTION FACES ‘PERFECT STORM’ AS SUPPLY SHORTAGES LOOM
UK construction is facing a “perfect storm” of growing skills and materials shortages as demand for building reaches record levels driven by home improvements, the housing market and new i ...
DEMAND FOR CONSTRUCTION WORKERS CLOSE TO 20 YEAR HIGH
The staff shortage in construction is continuing to bite, with 33,000 job vacancies for the period of April to June according to the latest figures from the Office for National Statistics. It is the s ...