On 3 June 2019, the Law Society published its response to HMRC’s consultation on the proposed extension, from April 2020, of the off-payroll tax rules (used to determine how employment taxes apply to individuals who provide services through an intermediary) to the private sector.
The relevant proposals aim to:
- shift the requirement to determine employment status from the worker to the client and,
- affect the obligation to account for such tax to HMRC.
The Law Society’s view is that the proposed rules will be problematic in practice, as the risk of getting employment status determinations right and the secondary liability provisions are unfairly shifted to the taxpayer. Employment tax advisers will be among those affected by the proposals, as well as those who work through personal service companies.
The consultation has not closed and will inform the content of the draft Finance Bill which is to be published in summer 2019. The reforms are expected to come into force from 6 April 2020.