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What are the off-payroll working rules? | What does off-payroll working rules IR35 apply mean?

What are the off-payroll working rules? | What does off-payroll working rules IR35 apply mean?

Mike Wakeford

What are the rules of off-payroll working?
The rules for individuals providing services via an intermediary such as a personal service company (PSC) are complex. The rules apply if the worker who provides services to a client through their own intermediary would have been an employee if they were providing their services directly to that client.

The off-payroll working rules usually shift the responsibility for deciding whether the intermediaries’ legislation applies, known as IR35, from the intermediary itself to the client receiving the service. In most cases, the client will be responsible for determining the employment status of the worker. However, if a worker provides services to a small client outside the public sector, the worker’s intermediary is responsible for deciding the worker’s employment status and if the rules apply.

You may be affected by the off-payroll working rules if you are:

  • a worker who provides their services through their own intermediary to a client;

  • a client who receives services from a worker through their intermediary; or

  • an agency or other supplier providing workers’ services through their intermediary.

Do off-payroll working rules apply to small businesses?
There are different off pay-roll working rules that apply to those working for a small business and those working for medium or large-sized businesses.

Private sector companies and voluntary sector organisations are considered medium or large-sized if they meet two or more of the following conditions:

  • have an annual turnover of more than £10.2 million;

  • have a balance sheet total of more than £5.1 million; 

  • have more than 50 employees.

There are a number of scenarios that fall outside the off-payroll working rules. If you think you might be affected, we would be happy to help with looking at this issue.
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For support on payroll and how we can help you. Contact our specialist Payroll team today. Our payroll team can help you manage your payroll and ensure that your compliant with all the new working rules. For more information on how we can help you contact us today.