The government is taking on board concerns expressed by businesses about the implementation of the off-payroll working rules to the private sector, with effect from 6 April 2020.

It previously made a change to the new tax rule so that services provided wholly before 6 April, but paid for on or after 6 April, will not be caught by the new rules (see report here Now HM Treasury has published a policy paper containing further measures. The policy paper was published on 27 February 2020 in an attempt to address concerns identified by HM Treasury during its review of the implementation of the off-payroll working rules.

The measures include:

  • new legislation imposing an obligation on clients to respond to information requests regarding their size within 45 days. This will enable agencies and representative bodies to determine whether the rules apply;
  • legislative amendments excluding from the rules those wholly offshore companies without a UK presence. Existing rules will continue to apply;
  • legislative amendments to clarify time limits for disagreements on employment status;
  • extra communication and the launch of new products, including a help sheet to assist contractors in understanding and operating the new rules. This should address the concern that there is not enough support for contractors in understanding the changes.

Further, HMRC has confirmed that, whilst all parties grapple to understand the new rules for the first year of their life, it will not impose inaccuracy penalties unless there has been deliberate non-compliance. However, this slightly “hands-off” approach should not be taken to mean that businesses and individuals should not review their arrangements.

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