On 07 January 2020, the UK Government announced a review into the implementation of the roll-out of off-payroll working rules from 06 April 2020.
The review came about as a result of widespread concern that the industry was not prepared for the reforms. These are schedules to be included in the Finance Bill 2020 and will amend Chapter 10 of the Income Tax (Earnings and Pensions) Act 2003.
The reviews will focus on the ‘implementation’ of the reforms and determine whether or not there is more that the UK Government can do to help employers prepare.
Jesse Norman, Financial Secretary to the Treasury said that the results of the review are due to be published mid-February 2020.
Announcement 07 February 2020
Ahead of the publication of issues raised in the review, HMRC made an announcement on 07 February 2020, intended to ‘give businesses certainty and more time to prepare’. The off-payroll reforms were dues to apply to payments made on or after 06 April 2020, regardless of when the work had been performed. HMRC have now announced that the legislation will be amended so that the reforms apply to services provided on or after 06 April 2020.
This change means that engagers will only have to look at whether the off-payroll reforms apply to workers performing services on or after 06 April 2020.
In the first instance, HMRC intends to contact engagers / employers who have attended their Webinars and have been advised differently. This contact will explain that there has been a change.
Secondly, HMRC have updated their Employment Status Manual which contains draft guidance.
This minor change is welcome clarification for engagers. Although, looking at the reforms on a wider scale, this small change will be little comfort to engagers and workers who may be caught under the reforms from April 2020. Of course, the main concern is assessing the workforce and determining employment status for tax. This change does nothing to address that.