Off-payroll working rules came into force in the public sector in April 2017. Now it's being introduced to the private sector too ...
This is part of the Finance Bill 2020 and it seems that the Government have simply ignored the serious concerns raised by business organisations such as The Freelancer & Contractor Services Association.
This means that every private sector business must complete a status determination per individual (no blanket assessments) when offering a contract and decide if the contractor should go on the payroll or not.
And there is no appeals process for this! Instead, a 'client-led status disagreement process' will be introduced. The contractor can only dispute their given status to the company who may rather ensure their contractors are on the payroll for convenience.
Thankfully, small companies (as defined by the Companies Act) remain exempt from this new legislation so can freely hire contractors as and when required, and let them determine their own tax status.
Julia Kermode, CEO of The Freelancer & Contractor Services Association commented, "The reforms will be devastating for the UK economy and I would urge our next new Prime Minister to take a sensible look and a sensible view before pressing ahead with these damaging proposals," and added, "The UK's economy is in a delicate state right now and these reforms will do little to alleviate the UK's problems."
Industry commentators also say that now is the worst time to introduce this legislation with all the uncertainty around Brexit and the UK Government desperate to keep businesses invested in the country as we find our new place in the world.
The only benefit to this new legislation is that a contractor can dispute their status with the company they wish to contract with, so legal advice will give them a truer picture of their status before starting work with the company.
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