Intermediaries which are not personal service companies such as firms of management consultants will be treated differently from personal services companies in the new off-payroll working regime.
It has been announced in a written ministerial statement from Jesse Norman, the Financial Secretary to the Treasury, that the new off-payroll working rules which come into effect on 6 April 2021 will be tweaked in Finance Bill 2021. The change will ensure that intermediaries that are companies are not treated in the same way as intermediaries that are personal service companies (PSC).
HMRC has told ICAEW’s Tax Faculty, of which Charles Marcus is a member, that businesses should continue to prepare for the introduction of the off-payroll working rules on the basis that Chapter 10 will not apply where:
- an individual performs services for a client;
- that individual is already engaged under a contract of employment; and
- their earnings are subject to PAYE by another party in that supply chain, other than that individual’s PSC.
For example, if a worker is employed by a firm of management consultants that operates PAYE on the payment to the worker and that worker performs services to a client, Chapter 10 should not be applied.