HMRC have issued a new briefing ‘Reform of off-payroll working rules’ about the extension of the rules to the private sector from April 2020.

The off-payroll working rules only apply in cases where, if you worked directly for the end client you would be deemed to be its employee in terms of the employment status tests.

From 6 April 2020, private sector engagements through personal service companies (PSCs) will be taxed in two different ways:

HMRC estimates that, outside of the public sector, only 10% of people who should be paying tax under the current off-payroll working rules are doing so correctly and that currently, an individual with an income of £50,000 who works through their own company, but doesn’t follow the rules, will contribute about £6,000 less than somebody doing a very similar job as an employee.

There are a few points of interest included in this latest briefing:

Links to our guides:

Personal service company (PSC) tax

Off-payroll working: PSCs & Private Sector Engagers

Employment status

IR35: Off-payroll working

External link:

HMRC issue briefing: Reform of off-payroll working rules