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Following the Chancellors budget yesterday, Government will reform the off-payroll working rules (known as IR35) in the private sector.
In April 2017, the Government changed the rules for public sector bodies engaging workers through Personal Service Companies (PSCs). This shifted the responsibility for establishing whether IR35 applied to the engagement from the worker and their PSC to their engager. Consequently, if the engager thinks IR35 applies, it is required to deduct PAYE from the payment it makes to the PSC and pay employer’s NIC on that payment.
Following a consultation, the Government has announced its intention to extend the rules that currently apply in the public sector to the private sector. The change will be introduced from April 2020. Small organisations will be exempt, but no details of which organisations will qualify for this exemption have yet been released. The Government expects to raise £1.1bn from this measure in 2020-2021 and a further £1.9bn by the end of 2023-2024, suggesting it perceives significant non-compliance in this area.
For further details on the proposed change, please click on this link: