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Get ready for changes to the off-payroll working rules

If your law firm engages any solicitor or other person to work like an employee but through an intermediary such as a personal service company or limited liability partnership (PSC), you should consider the potential impact of the off-payroll working rules that come into effect from 6 April 2021.

The off-payroll working rules are intended to achieve essentially the same income tax and national insurance contribution consequences for individuals who work like employees but through intermediaries.

The off-payroll working rules that apply from 6 April 2021 broaden the scope of existing rules to shift the responsibility from the PSC to the organisation that engages the person through the PSC, with consequent changes as to who is responsible for accounting for the taxes that are payable.

All public sector authorities and medium and large-sized private sector clients will be responsible for deciding if the rules apply.

However, if a worker provides services to a small client in the private sector then the worker’s intermediary will remain responsible for deciding the worker’s employment status and if the rules apply.

Read the HMRC issue briefing

Read the policy paper on the off-payroll working rules from April 2021

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