New IR35 rules for public bodies | KPMG | GLOBAL

New IR35 rules for public bodies

New IR35 rules for public bodies

What do the new IR35 rules mean for your organisation?

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From 6 April 2017 all Public Sector organisations as defined in the Freedom of Information Act 2000 will be responsible for reviewing and identifying the employment status of all workers engaged through personal service companies (PSCs) including those provided through a third party (e.g. an agency). These new requirements will present a number of questions for Public Sector organisations.

Affected organisations should be considering:

  • The processes and controls that need to be introduced to meet the new compliance requirements;
  • Whether the contract with the third party relates to the supply of labour, which is caught by the new rules, or the supply of services which may fall outside of the rules; and
  • The information required and process for establishing the employment status of the worker where the engagement is caught by the new rules.

Establishing Employment Status 

With just a few weeks to go before the new IR35 rules come into force, HMRC have launched their new Employment Status Service (ESS) tool to provide individuals, agencies and Public Sector bodies HMRC's view of a worker's employment status. Whilst it was hoped that the tool would simplify the process of deciding employment status, this has not proven to be the case and, in many cases the tool does not generate a definitive response.  In such cases, the organisation will need to contact HMRC’s helpline or carry out its own review to determine employment status. On a positive note, where the decision confirms that the engagement is not caught by the new rules, HMRC will stand by the results from the ESS (that is unless it considers that the results have been manipulated to “get a particular outcome from the service”). Further information on the ESS tool and the new IR35 rules can be found at KPMG Employers’ Club (registration required).

If you have any questions about what the new rules may mean for your organisation, then please get in touch with your usual KPMG contact, or email our off payroll team.

 

For further information please contact :

Caroline Laffey

Colin Purdue

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