06 December 2016 
Emma Keenan, Procurement Specialist
Despite BUFDG and other groups opposing the change, the government announced this week that it's pushing ahead with proposed changes to the 'off-payroll' IR35 rules, which will apply from April 2017. The rules ensure that individuals who work through their own company pay employment taxes appropriately. The change in legislation moves responsibility for deciding if the off-payroll rules for engagements in the public sector apply from an individual workers personal service company to the public sector body which pays them. This means that the public sector body will also be responsible for deducting and paying associated employment taxes and national insurance contributions to HMRC.
As an example, from April 2017, if you employ a consultant who has his/her own company that you pay the consultant through, you will be responsible for deducting the appropriate taxes etc. and paying the individual the balance - still through the PSC.
The government is proposing a digital tool to help bodies identify those in organisations that will be affected by this change, however we do not anticipate that this will be available until much closer to April. The full guidance is available here.
This is a good time to understand just how many individual suppliers this might affect in your institution and consider how you might communicate the importance of the changes to other departments. We anticipate that procurement departments will need to work closely with tax, payroll, accounts payable and HR colleagues to determine how best to identify both existing and new suppliers who will be affected by this change, as well as processes to deal with payments correctly.
We will be working hard with our tax specialist Amanda Darley to provide some practical guidance around this subject over the next few weeks.
