Having identified all key stakeholders and off-payroll workers in your organisation, this will feed into the next step of a two-fold assessment of the organisations’ risk appetite measured against the business needs.
For those who are risk averse, the above outlines several alternatives to engaging off-payroll workers caught by the new rules, which may involve changing your business model.
Employers should evaluate their business and operational strategies in light of how exposed they are to these reforms and their future business needs – do you need to conduct a GAP analysis, or have internal discussions with key stakeholders?
If you wish to continue engaging with PSCs, then it will become the engager’s responsibility to perform and evidence an employment status check on the individual. Employment status is a subjective area based on case law rather than legislative tests and as a result, there is an embedded risk.
Ultimately, what is right for your organisation going forward may differ from others, and therefore it is essential you take the time now to discuss these effects head of 06 April 2020.
HMRC’s consultation on off-payroll working closed on 28 May 2019 and will inform the draft legislation on this area which is due to be published in the coming months.
While we wait for the draft legislation, an important first and proactive step is to identify key stakeholders and all off-payroll workers. This includes all current engagements with intermediaries including personal service companies and agencies that may supply labour to your organisation.
Completing these tasks early on will enable you to:
Evaluate how exposed is your organisation.
Do you mostly engage off-payroll workers in a particular business functions e.g. IT? Can this function be fully outsourced instead?
Are these workers engaged regularly?
Communicate potential impacts to key stakeholders ensuring they are part of future discussions on this topic.
Who are the affected populations?
To feel comfortable with the position, do you need to conduct an employment status review on any individuals or seek specialist advice?
Give yourself time to make and implement any changes needed ahead of 6 April 2020.
Including stage two which will be made available in the next issue of Employers Digest, our regular employment taxes newsletter.
Note: that any changes to off-payroll worker status may have an employment law impact as well as a tax and NIC implication, and so you should take all considerations into account.
Off-payroll working in the private sector reforms