The Off-Payroll Working Rules are relevant to three main parties:
Workers: These are individuals who provide their services through their intermediary, which could be a limited company, a partnership, or another individual.
Clients: Clients are the entities that receive services from workers through their intermediaries.
Agencies and Suppliers: This category includes agencies or suppliers who provide workers’ services through their intermediary. They have responsibilities under these rules, especially when they are considered the deemed employer.
**It’s important to note that there are different rules for small businesses compared to mid or large-sized businesses.
When Do the Rules Apply?
The application of the Off-Payroll Working Rules depends on the client’s sector and size:
Public Sector Clients: In most cases, the responsibility for determining the employment status of the worker falls on the client when they are in the public sector.
Private and Voluntary Sector Clients: Similarly, for clients in the private and voluntary sectors, the client is generally responsible for determining the worker’s employment status.
Small Businesses: If a worker provides services to a small client outside the public sector, it is the worker’s intermediary that determines the employment status and if the Off-Payroll Working Rules apply.
The rules regarding size classifications only apply to clients. Agencies, regardless of their size, have certain responsibilities when these rules are in effect, particularly when they are considered the deemed employer.
In conclusion, the Off-Payroll Working Rules (IR35) in the UK are designed to ensure fair tax and National Insurance contributions for workers who provide services through intermediaries. These rules have different implications depending on the sector and size of the client, with clients generally bearing the responsibility of determining employment status. To fully understand and comply with these rules, it’s essential to seek professional guidance, experts from Dauman & Co. team can help, especially for those operating in the intricate world of contracting and self-employment.