Budget 2018: the chancellor has announced that the public sector off-payroll working rules will apply to the medium and large businesses in the private sector from April 2020.

Medium and large businesses who are engaging individuals who work via a Personal service company "PSC" will need to decide whether the Off-Payroll working rules apply to the engagement.

Where it is determined that the rules do apply, the business, agency, or third party paying the worker’s company will need to deduct income tax and employee NICs and pay employer NICs.

The existing IR35 rules will continue to apply to small businesses and companies will continue to self assess as to whether IR35 applies to each engagement.

HMRC has developed the Check Employment Status for Tax (CEST) service to help businesses determine whether the off-payroll working rules apply. HMRC will continue to work with stakeholders to improve further CEST and guidance before the reform comes into effect

Useful links:

Budget 2018 live highlights

Budget 2018 summary


External link

HM Treasury: Budget 2018 Increasing compliance with the off-payroll working rules in the private sector (“IR35”)