Off-payroll working in the private sector: A public consultation

Chris Thompson

It’s proposed that any business with 50 or more employees will, from April 2020, be subject to the same rules regarding off-payroll working as currently apply in the public sector. 

This means the business that engages the personal services company will be responsible for assessing whether the individual supplied to perform the services should be treated as an employee for tax purposes. 

If you currently engage contractors who work through their own personal service company or similar intermediary, this will impact you and the individuals providing the services.

The HMRC consultation paper published on 5 March 2019 seeks views on the best way to implement the reforms and ensure the proposed processes are suitable for the large and diverse private sector, as well as engagers in the public sector already applying the rules.

More specifically, the consultation asks for views and information on topics that include:

The consultation also sets out how businesses can prepare for reform. 

However, whilst HMRC is putting forward plans to “provide education and support”, it is almost certain that the overwhelming majority of those responding will be firmly against the reforms, pointing out that the public sector reforms have caused many to stop offering their services through off-payroll working arrangements and that costs have as a consequence risen.

The employee status ‘test’ tool - blamed by many for causing confusion - is being reviewed though and that will be welcome news to many contractors, employment businesses and end users. 

The closing date for responses to be taken into account is 28 May 2019.

In the meantime, should you have any queries or comments about how your business might get ahead, please feel free to contact myself or another one of Gateley’s national Employment team.

Contact our expert

Chris Thompson

Chris Thompson


Chris is a partner who has specialised in employment law since qualification in 1997. He is recommended for employment law in the prestigious 2012 Legal 500 directory of UK lawyers and law firms.