Draft legislation dealing with Off-Payroll Working in the Private Sector from April 2021 has been added to Finance Bill 2020 despite the recent conclusions by the House of Lords' Economic Committee that the rules are flawed and need a re-think.

The draft rules are largely the same as those included in the original draft Finance Bill in July 2019, subject to some slight clarifications about the requirement for an end client to have a UK connection for the rules to apply and the legal obligation for end clients to provide status determination statements to workers if they request them. The only change of note is the already announced delay to the start date, to 6 April 2021, due to the Coronavirus pandemic.

It seems that for now at least, the government intends to ignore the views and recommendations of the House of Lords and leave the IR35 and Off-Payroll Working rules intact, despite the committee having come up with a range of alternative solutions for them to consider.

Links to our guides

Employment status checklist
The employment status of an individual worker depends on whether the individual is engaged by the engager under a 'contract of service', or a 'contract for services'.

Personal Service Companies (PSC) & tax (subscriber)
A Personal Service Company (PSC) derives its income from the activities of one individual. It is also a close company for tax purposes.

IR35 (subscriber)
The special tax rules apply when a worker supplies their personal services through an intermediary trading vehicle such as a company or partnership to an end client.

Off-Payroll Working: PSCs & Public Sector Engagers (subscriber)
The 'Off-Payroll Working' rules moved IR35 to public sector engagers in April 2017.

Off-Payroll Working: PSCs & Private Sector Engagers (subscriber)
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.

External link

Draft Finance Bill 2020: Off-Payroll Working