From 6 April 2021, the tax rules about taking on an off-payroll worker (that is, one who invoices for work rather than being on PAYE) are changing.
The changes will mostly affect large and public companies and contractors working for them, but smaller businesses can be caught out.
The main change is that if a large company engages someone who acts like an employee, the large company is responsible for deciding whether they should be on PAYE. They then need to pass that decision on to other businesses involved.
Smaller businesses are affected in two ways:
1. You may need to put the contractor on your payroll, if a client of yours instructs you to.
2. You need to make sure that you pass any relevant information on – if you fail to do so, you could be liable to pay the contractor’s tax bill.
Contractors need to be aware of the change when dealing with large businesses, so they can ensure that the correct decision is made.
For more details, please see our helpsheets:
If you have any questions about how it could affect you, please call or email and we will be happy to help.