Search
  • John OSullivan

Good News - Change proposed to off-payroll working rules for intermediaries

13 November 2020: Intermediaries which are not personal service companies such as umbrella companies and agencies, will be treated differently to personal services companies in the new off-payroll working regime.

It has been announced in a written ministerial statement from Jesse Norman, the Financial Secretary to the Treasury, that the new off-payroll working rules which come into effect on 6 April 2021 will be tweaked in Finance Bill 2021. The change will ensure that intermediaries that are companies are not treated in the same way as intermediaries that are personal service companies (PSC).

If left unchanged, then, where the other conditions of Chapter 10 are met, PAYE could have been required to be withheld from payments to a wider than intended range of companies providing a worker’s services to a third party. This would have included:

  • umbrella companies;

  • employers seconding employees; and

  • agencies providing workers.

The amended conditions in s61O, ITEPA 2003 (added by FA 2020) were intended to prevent avoidance arrangements that seek to get around the material interest test. The wider consequences of this amendment were not the policy intention.

10 views0 comments

Recent Posts

See All

HMRC’s ‘Tax avoidance - don’t get caught out’ campaign helps contractors to spot the signs of tax avoidance, understand the financial risks and check their pay arrangements to prevent an unexpected ta

A clarification and reminder following the Spring Statement Voluntary class 2 national insurance contributions are unaffected by the Spring Statement changes, but don’t forget that class 4 losses migh

As the existing research and development tax relief regime faces criticism that it is not working as well as it should in increasing investment, speculation rises that an overhaul is imminent. Watch t