New Forest

15/12/2019

‘Postpone off-payroll extension to the private sector until 2021’

Extending off-payroll rules to the private sector in April 2020 should be delayed by a year, a tax group has said.

Chancellor Sajid Javid intended to deliver his first Budget speech on Wednesday 6 November, only for it to be scrapped after a second Brexit extension was granted.

In light of that and the subsequent general election, the Association of Taxation Technicians (ATT) called for the extension of the rules to be delayed by 12 months.

It claimed delays to the Budget and the Finance Act will leave private-sector businesses with insufficient time to prepare.

From April 2020, off-payroll working rules that currently apply to public-sector contractors are scheduled to be extended to the private sector.

Subject to change, medium and large-sized organisations that use private-sector contractors will determine whether an engagement falls within the rules from this point.

Jon Stride, co-chair of the ATT’s technical steering group, said:

“We strongly urge the Government to delay this major shift in how businesses engage with contractors until 2021.

“We anticipate low levels of compliance, increased numbers of errors, and greater demand on HMRC for support at a time when their resources are already strained.

“The Government previously stated they were committed to learning from the rushed introduction of these rules to the public sector in 2017.

“We believe that introducing the off-payroll rules to the private sector in April 2020, when final legislation and detailed guidance are not yet available, risks repeating the errors made in the public sector, rather than learning from them.”

Meanwhile, HMRC launched an updated version of its check employment status for tax (CEST) tool towards the end of last month.

Introduced in 2017, the CEST tool aims to help contractors and organisations decide if a worker should be taxed as an employee.

Following widespread criticism from the public sector, the Revenue sought to “make the tool clearer, reduce user error and ensure it considers more detailed information”.

For further information on off-payroll working, please contact Alan Rolfe on 023 8046 1235.

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