HMRC has updated the off-payroll IR35 aspects of its Employment Status Manual ahead of the changes to the regime taking effect on 6 April 2021. These updates include:
HMRC confirming its commitment not to use information acquired as a result of the changes to the off-payroll IR35 rules to open new compliance checks for previous tax years. This commitment extends to any status determination statement (SDS) which may have been prepared for the tax year beginning 6 April 2020 (i.e. when the changes were originally due to take effect). HMRC states it will also not ask contractors, agencies or engagers for any SDS that may exist relating to the tax year 2020-21 as evidence in ongoing enquiries. However, HMRC says it may use such information if it is provided (ESM10036);
a new template for businesses to use when a worker requests confirmation of the engager’s size (pursuant to ITEPA 2003 s 60H) (ESM10011B);
further detail on how HMRC will use its legislative recovery of debt powers, including a view that there are ‘likely to be limited circumstances’ where both the new FA 2020 joint and several liability provisions and the off-payroll IR35 recovery from other persons provisions could apply (ESM10031);
further guidance, with examples, on making PAYE deductions from chain payments (ESM10021);
HMRC committing to publishing a ‘self-help guide’ for contractors and agency workers on how to avoid entering into non-compliant arrangements (ESM10036);
new wording that states that when an engager issues a ‘check employment status for tax’ (CEST) output as an SDS, HMRC will deem this to mean the engager agrees with the CEST output and that the conclusion in the output is also the engager’s conclusion (ESM10013);
new guidance on the interaction between statutory payments and the off-payroll IR35 rules (ESM10033A); and
a new page explaining that the off-payroll IR35 rules take precedence over the construction industry scheme rules (ESM10004A).
In addition, the wording that the off-payroll IR35 parts of the ESM are ‘draft and may be subject to change’ has now been removed.
HMRC has updated the off-payroll IR35 aspects of its Employment Status Manual ahead of the changes to the regime taking effect on 6 April 2021. These updates include:
HMRC confirming its commitment not to use information acquired as a result of the changes to the off-payroll IR35 rules to open new compliance checks for previous tax years. This commitment extends to any status determination statement (SDS) which may have been prepared for the tax year beginning 6 April 2020 (i.e. when the changes were originally due to take effect). HMRC states it will also not ask contractors, agencies or engagers for any SDS that may exist relating to the tax year 2020-21 as evidence in ongoing enquiries. However, HMRC says it may use such information if it is provided (ESM10036);
a new template for businesses to use when a worker requests confirmation of the engager’s size (pursuant to ITEPA 2003 s 60H) (ESM10011B);
further detail on how HMRC will use its legislative recovery of debt powers, including a view that there are ‘likely to be limited circumstances’ where both the new FA 2020 joint and several liability provisions and the off-payroll IR35 recovery from other persons provisions could apply (ESM10031);
further guidance, with examples, on making PAYE deductions from chain payments (ESM10021);
HMRC committing to publishing a ‘self-help guide’ for contractors and agency workers on how to avoid entering into non-compliant arrangements (ESM10036);
new wording that states that when an engager issues a ‘check employment status for tax’ (CEST) output as an SDS, HMRC will deem this to mean the engager agrees with the CEST output and that the conclusion in the output is also the engager’s conclusion (ESM10013);
new guidance on the interaction between statutory payments and the off-payroll IR35 rules (ESM10033A); and
a new page explaining that the off-payroll IR35 rules take precedence over the construction industry scheme rules (ESM10004A).
In addition, the wording that the off-payroll IR35 parts of the ESM are ‘draft and may be subject to change’ has now been removed.
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