HMRC has introduced secondary draft legislation relating to off-payroll working rules for individuals providing services in the public sector declaring that National Insurance Contributions (NICs) are to be paid by the public authority paying for the services, with changes to come into effect from April 2017
The legislation states that the responsibility for carrying out the off-payroll working rules and deducting NICs and tax due will lie with the public sector body that pays for a worker’s services
The new regulations are to be introduced into the Income Tax (Earning and Pensions) Act 2013 in the the Finance Bill 2017.
Regulation 15 will apply where:
- An individual performs services for another person (client);
- The client is a public authority;
- The services are not provided directly between person and client but are under arrangements involving a third party – an intermediary; and
- The circumstances are: (i) if the services were provided under a contract between the client and the worker, the worker would be regarded for Class 1 NICs as an employee of the client or (ii) the worker is an office-holder who holds that office under the client and the services relate to that office.
The public consultation opened on the 27 January and will close on 17 February 2017.
There are concerns among stakeholders that these changes will be extended to the private sector in due course.
Draft legislation: The Social Security (Miscellaneous Amendments) Regulations 2017 is available here.
