Off-payroll working extension to private sector

Reforms in the public sector have been incredibly successful in increasing compliance with the IR35 rules on off-payroll working. Since April 2017 the rules apply where public sector organisations contract with personal service companies (PSCs). They shift the responsibility for determining whether the intermediaries rules apply to the end user where that end user is a public sector body. This simple shift in responsibilities has resulted in an additional £410m of income tax and national insurance contributions (NICs) in the period since the reforms were introduced.

It was little surprise then when the consultation setting out proposals for extending the new rules to the private sector was published on 18 May 2018. Although it sets out other alternatives, the document’s clearly favoured proposal is to place the burden of compliance on the end user.