Reversal of Off-Payroll Working Rules

Having only just come into effect, the Off-payroll working rules will be changing once again. Under the current rules it is the responsibility of the end client or fee payer to determine the tax status of the individual engaged to provide a service. The rules surrounding this have been complex and many businesses have spent the last few years investing in their practices to comply with the new rules.

One of the key announcements in the recent Mini-budget, was the repeal of the public and private sector Off-payroll working rules with effect from 6th April 2023. From this date workers providing a service via a personal service company will be responsible for determining their own tax status and paying the appropriate tax and NIC.

This will be good news for many, who have been affected by these recent changes and will minimise the risk that has impact genuine self-employed workers. It will also remove a significant compliance burden for many businesses. Organisations will now review their agreements in place with current employees and will also be thinking about the future structure of the business. However, many organisations have invested time and effort to ensure they comply with the Off-payroll working rules and may be cautious in making further changes. As we have seen – a U-turn is always a possibility. We will keep you updated on any further developments on this policy.