The rules for off-payroll working changed in April 2021. If they apply to someone who works for you, or you are the worker, there are new payroll and self-assessment reporting requirements. How might they affect you?
Off-payroll and RTI. The long-awaited changes to the off-payroll working ( IR35 ) rules took effect on 6 April. HMRC is reminding businesses and other organisations that are or will apply the rules to contractors who work for them, that payments made on or after 6 April 2021 are only affected if the work in question was carried out on or after that date.
Tip. If you’re a contractor and the business or organisation you work for is applying the off-payroll rules to your contract, make sure that if you send an invoice covering work done both before and after 6 April you specify the values for each.
Payroll indicator for payers. When including payments you make to a contractor for off-payroll work in your payroll you must use the “off-payroll worker subject to the rules” indicator in your PAYE RTI reports (full payment submission) (FPS). The name of the indicator might be different depending on what payroll software you use, however it should be easy to spot. Warning. If you use, or have used, the indicator for a payment when you shouldn’t have, HMRC is asking that you urgently send a corrective FPS for the relevant payroll period.
Off-payroll workers. If you’re a contractor and are applying the off-payroll rules to payments you receive from a customer (rather than your customer applying them), you must not use the off-payroll indicator mentioned above. HMRC is especially adamant about that.
Self-assessment. If your customer is applying the off-payroll rules and you’re repaying a student loan, you should make sure that you’re registered for self-assessment to ensure that HMRC calculates the correct loan repayments (see The next step ).
When reporting PAYE and NI for a worker made under the off-payroll rules you must use the special indicator in your payroll software. The rules don’t apply to payments made after 6 April 2021 that relate to work done earlier.
The next step
Register for Self Assessment
HMRC’s guidance on when you must apply the off-payroll rules
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