You may be affected by the off-payroll working rules if:
- You are a worker providing services through your own limited company or other intermediary to an end client
- You are a client who receives services from a worker through their own limited company or other intermediary
- You are an agency providing another worker’s services through their intermediary
An intermediary will usually be the worker’s own personal service company, but could also be another entity such as an agency.
The rules look at whether, if the worker was providing their services directly to the end client without the intermediary, they would be classed as an employee. If that is the case, they are covered by the off-payroll working rules and will pay broadly the same Income Tax and National Insurance as an employee.
From 6th April 2021, all public authorities and medium and large-sized clients outside the public sector are responsible for deciding if the rules apply to any of their engagements.
However, if a worker provides services to a small-sized client outside the public sector, it is the worker’s own limited company or intermediary that is responsible for deciding if the rules apply.
If the rules do apply, a PAYE scheme must be opened and Income Tax and employee National Insurance contributions must be deducted from fees and paid to HMRC. In addition, employer National Insurance contributions and Apprenticeship Levy, if applicable, must also be paid to HMRC.
You can use the Check Employment Status for Tax service to help you decide if the off-payroll working rules apply to you.
The off-payroll working rules apply on a contract-by-contract basis so you may have some contracts which fall within the off-payroll working rules and some which do not.
Please contact us if you require further information about off-payroll working rules or if you believe that they may apply to your situation.