Changes to Off-Payroll Working April 2021
Reforms to the off-payroll working rules (IR35) from 6 April 2021
The key changes are:
You must continue to decide the employment status of every worker. You must do this for every contract you agree with an agency or worker. You need to:
- Pass your determination and the reasons for the determination to the worker and the person or organisation you contract with. A copy of the new CEST tool is sufficient
- 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
If the University is also the fee-payer and should the off-payroll working rules apply, we will need to deduct and pay tax and National Insurance contributions to HMRC. If an agency is the fee-payer, and the off-payroll rules apply, then the agency should deduct and pay tax and National Insurance contributions to HMRC. A copy of the CEST tool should be sent to the agency for each new engagement.
Taking reasonable care when making a determination
You must take reasonable care when you make a determination about the employment status of a worker.
Failure to do so will result in the worker’s tax and National Insurance contributions becoming the engaging department’s responsibility.
Who to tell about your determination
From 6 April 2021, you must provide the worker and the agency, or other organisation you contract with, our determination. This should always be completed whether our determination shows that the off-payroll working rules will apply or not.
You must provide reasons for your determination. A copy of HMRC’s CEST tool is sufficient evidence, and should be given to every worker and agency (if applicable).
We will hold the liability for tax and National Insurance contributions until you tell the worker, and the person you contract with, of your determination and the reasons for it.
A status determination statement issued before 6 April 2021 is valid under the new rules, if it contains the reasons for the conclusion reached. If the working practices of the engagement change or you negotiate a new contract with the worker, you need to make sure that you re-check the rules to see if they still apply.
What to do if a worker or deemed employer disagrees with your determination
A worker or the agency paying the worker’s intermediary may disagree with the employment status determination you reached.
If this happens you will need to:
- Consider the reasons for disagreeing given to you by the worker or agency paying their intermediary
- Decide whether to maintain the determination if you feel it is correct and give reasons why - or provide a new the determination because you feel it was wrong
- Keep a record of your determinations and the reasons for them, as well as records of representations made to you
You must provide a response within 45 days of receiving notification that the worker or agency disagrees with your employment status determination. During this time you should continue to apply the rules in line with your original determination.
Tell the worker if the determination has not changed.
Tell the fee-payer and the worker if the determination has changed.
Failure to respond within 45 days will result in the worker’s tax and National Insurance contributions becoming your responsibility.