Off-Payroll Tax Handbook

Description

DELETE Preface Table of Statutes Table of Statutory Instruments Table of Cases Chapter 1 Outline and Recent Developments Background – Employment status Mutuality of obligation Personal service Control All other factors The rise of personal service companies Agencies paying people ‘off payroll’ Recent developments IR35 public sector IR35 private sector IR35 case law Employment status Umbrella companies Chapter 2 Employment Status Legislation and case law Background The main employment status tests Difficulties with employment status Hierarchy of the courts Ready Mixed Concrete Control The importance of control Sufficient degree of control Who controls the individuals? The different aspects of control Mutuality of obligation Is mutuality of obligation important? What is meant by mutuality of obligation? Mutuality of obligation ‘within’ a contract Mutuality of obligation in IR35 cases Notice periods Summary on mutuality of obligation Personal service The ‘right’ of substitution Right to assign Too fettered Substitution clauses in contracts Sham contract Factors that are inconsistent and ‘in business’ test The intention of the parties Myths and misunderstandings They have a UTR so must be self-employed! They submit invoices They work for other people They provide their own equipment and/or materials They work five days a week most of the year so must be employees Once they have worked for three months (or two years) they have to be put on PAYE They work alongside another employee so can’t be self-employed The future Legislation change? How do other countries deal with status? Moving forward Chapter 3 Agency Workers Background Self-employment IR35 PAYE Self-employment The old version of the agency legislation The 2014 legislation Personal service When is a company an agency? Control What constitutes employment income? Liability and fraudulent documentation Excluded services Anti-avoidance Reporting Expion Silverstone case Personal service companies (PSC) IR35 IR35 – Public sector agency work IR35 – Private sector agency work PAYE self-employed hybrid Statement of works/contracting out Chapter 4 Umbrella Companies Background How and why does an umbrella company work? Where did it start to go wrong? 2016 – change to expenses for intermediaries Expenses for PSCs Transfer of liabilities Fraudulent information Chapter 5 Managed Service Companies Background How the MSC rules work ITEPA 2003, s 61B(1)(a) ITEPA 2003, s 61B(1)(b) ITEPA 2003, s 61B(1)(c) Managed service company provider Carrying on a business of promoting or facilitating Involved with the MSC Exemptions Accountancy and legal Agencies Transfer of debt Practical issues Facts of the Costelloe case First and Upper-tier Tribunal for the Christianuyi case The Christianuyi case in the Court of Appeal HMRC activity Chapter 6 IR35: Personal Service Companies Background and scope Public sector changes 2021 – changes in the private sector The IR35 legislation Collection of taxes Case law overview Chapter 7 IR35 for Work at Small, Private Organisations Scope of the legislation The main parts of the legislation Is the organisation a public authority? Is the organisation ‘small’? Difference in National Insurance legislation IR35 flow diagram post-April 2021 Calculation and accounting for the deemed payment Construction Industry Scheme deductions and the deemed payment Applying the calculation in practice Chapter 8 Public Sector Work Background What is a public authority The 2017 legislation The fee payer Calculating the deemed payment Problems with processing PAYE for a company Flow of information Check Employment Status for Tax (CEST) New provisions for public sector bodies from 2021 Reasonable care in assessments Information flow Client led right of appeal Chapter 9 Private Sector Medium and Large Organisations Background Who is the client? When is a company medium or large? Outline of the new rules Fee payer Reasonable care in reaching decision Information about decisions Worker’s right of appeal Summary of who will be liable and when? Deemed payment Transfer of debt provisions Solutions and way forward PAYE and umbrella Sole trader Contracting out Agencies becoming consultancies/statement of works IR35 status determination Agency and fee payer Chapter 10 IR35 Case Law The heart of the legislation Office holders Terms Why aren’t sole traders caught by IR35? IR35 case law Special Commissioner cases The first IR35 case The first taxpayer win High Court win for HMRC Challenge the right client Clear as mud Two more High Court cases in HMRC’s favour Open and honest A small but important win for the taxpayer Dragonfly era MKM Computing and Alternative Book Company The taxpayer era A win for both sides Two clients – one caught, one not caught HMRC’s media campaign Chapter 11 IR35 Practical Issues Handling IR35 enquiries Check Employment Status for Tax tool (CEST) Meetings Fact finding Determinations and notices Hearing at the Tax Tribunal Witnesses Your Charter IR35 contract reviews Review the contract in practice Control Personal service Mutuality of obligation Experts and advisors Don’t be afraid of being outside IR35 Index