Overview of Draft Legislation

Charlie Cox, Commercial Manager for the SThree group of companies, provides an overview of the latest draft legislation.

We have now reviewed the draft legislation for the reform to Off Payroll rules in the Private Sector from April 2020 which was released today.

As expected, they seem to be very close to the proposed points in the consultation document with very few changes despite the issues that were raised during that consultation period.

The rules will closely mirror those that were put into the Public Sector in 2017 with a few key changes which we have summarised below:

  • Confirmation that these new rules will apply from April 2020
  • Small company exemption confirmed and definition as per Companies Act 2006
  • End Client in the chain are given fee payer responsibilities until such time as they pass on a ‘status determination statement’ to the party they contract with and the worker
  • Last party in the chain to receive the determination is classified as the fee payer and take fee payer responsibilities
  • For a 'status determination statement' to be valid it has to also include the reasons why the determination was reached, ensuring reasonable care is taking in reaching the decision
  • Contractors/PSCs can challenge the determination and clients are given 45 days to respond
  • If the client disagrees with the challenge then they have to provide the worker with the reasons as to why they believe that the determination was correct.

If the client agree that the determination was incorrect then they have to issue a new status determination.

We will publish further information and more detail in the coming days. For more information please visit our IR35 resources page found here.

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