Off-payroll working

Question 1

What do we need to consider if we have been asked about whether someone is “off-payroll” working

Answer 1

The best approach for this is to look in ITEPA2003 in which we are sole about the relevant obligations:

1. The individual is under obligations to perform the work
2. The individual is expected to complete the work themselves and can’t substitute
3. Is the individual in control of what is done day-to-day.
4. Is the individual integrated into the organisation.
5. Does he provide is own tools
6. Financial risk - does he risk making a profit/loss on the job
7. how many clients does he work for?

Question 2

What are some of the things we need to be careful about when doing a “deemed employment calculation” and when would we spot if this is what is being asked.

in addition, when is the payment considered to be made

Answer 2

So this will come about if we have been told things about potential off-payroll working and then been given a bunch of expenditure incurred in the course of the trade. We also need to be mindful this takes place where you are working for “small” companies as the risk falls on the individual.

We need to be mindful that step 2 asks as to “add” amounts to the deemed employment but this is only if income is received from other engagements apart from the intermediary itself. / we should also be cautious that step 7 asks us to deduct both SALARY & BENEFITS

the final step we need to do is to deduct the total amount of deemed income and then deduct 13.8% from it being the employers NICs contributions.

it should also be noted that in the legislation, deemed payment is considered to be made on the next closing tax year (5th April)