FOI Request - Public sector off-payroll (IR35) reforms

The request was successful.

Dear Sevenoaks District Council,

In April 2017 Government introduced new rules into the public sector called the off-payroll reforms, commonly referred to as “IR35”.
https://www.gov.uk/guidance/off-payroll-...

We understand you may (or may not) have planned for this and developed a set of internal guidelines to be used when on boarding flexible workers, or contractors.

Please can you:
1. Tell us if you are familiar with these reforms – yes or no?
2. send us a copy of your internal guidelines used for any internal guidance,
3. send us any policies you use surrounding the reforms.
4. send us any documents you use to explain your policies to agencies who supply workers to you.
5. Send us your internal guidance explaining how you assess the status for each contractor.

Thank you.

Yours faithfully,

Dave Chaplin

autoresponder@sevenoaks.gov.uk, Sevenoaks District Council

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FOI, Sevenoaks District Council

2 Attachments

Dear Dave Chaplin

 

Freedom of Information Request: 896 - 2018

 

Thank you for your request received by Sevenoaks District Council on 11
December 2018.

 

In relation to your enquiry, please find the Council’s response set out
below.

 

Your enquiry was:

 

In April 2017 Government introduced new rules into the public sector
called the off-payroll reforms, commonly referred to as “IR35”.

 

[1]https://www.gov.uk/guidance/off-payroll-...

We understand you may (or may not) have planned for this and developed a
set of internal guidelines to be used when on boarding flexible workers,
or contractors.

Please can you:

1.    Tell us if you are familiar with these reforms – yes or no?

2.    send us a copy of your internal guidelines used for any internal
guidance,

3.    send us any policies you use surrounding the reforms.

4.    send us any documents you use to explain your policies to agencies
who supply workers to you.

5.    Send us your internal guidance explaining how you assess the status
for each contractor.

 

Our response:

 

Please note the response is yes to all questions and then please see the
attached file and also the email below as that was the internal guidance.

 

Colleagues

 

The law is changing on the treatment of payments to individuals who are
working for the public sector ‘off-payroll’ through an intermediary. For
us this is likely to be professional or technical staff where we pay an
agency or pay a company that the worker has set up - a ‘Personal Service
Company’ (PSC). In future we will have to deduct PAYE and NI contributions
before we make payment to Personal Service Companies or, in some
circumstances to Agencies. In some cases the workers will have to go on
the payroll and be treated as employees.

 

Year end and final payments on Old arrangements

The new legislation takes effect for any payments made after 6^th April
(even if the work was done before 6^th April). Therefore I would like all
the invoices for work done up to 31^st March to be paid before 6^th April.
This schedule is tight but then most agencies etc will be keen to comply.
Please make sure that your ‘off-payroll’ workers are aware of this
schedule

 

 1. Working week finishes 31 March
 2. Invoice/time sheet delivered to [2][email address] by close
of business Monday 3 March 2017
 3. Invoices loaded onto Agresso by lunchtime Tuesday 4^th March 2017
 4. Invoices authorised on-line by 2pm Tuesday 4^th March 2017
 5. BACS run to bank pm 4 March 2017
 6. Payment agency or company bank account Thursday 6^th April.

 

These invoices will miss the cut off date for 16/17 payments so will need
to be included on your accruals sheets.

 

Any invoices that miss this deadline are likely to be subject to deduction
of PAYE/NI and payment will be delayed.

 

 

New Arrangements for work done after 1 April 2017

 

You will need to determine whether the IR35 Legislation applies – contact
Veronica (x7436) to go through the HRMC Employment Status tool (ESS)
([3]https://www.gov.uk/guidance/check-employ...) and get a
print out of the answers. This print out must be retained as evidence for
any future HMRC inspection, The worker can also go on-line and complete
the ESS tool but the final decision on how we treat their payment rests
with us.

 

There Are four likely results:

o If the engager – worker relationship is that of an employee – contact
HR and arrange for them to go on the payroll;
o If the ESS tool determines they are self-employed we need a UTR
(unique tax reference) before we can pay them;
o If they are outside the IR35 rules (usually companies) we will pay
them in full without deduction of PAYE;
o If they are inside the IR35 we must either deduct PAYE or ensure that
it is being deducted and handed over to the HMRC by another body.

 

If the Worker will be inside IR35

Before the worker does any work for you after 31 March, Write to them or
their agency and ask what arrangements are being made for payment of PAYE
/ Ni for that worker (See suggested draft).

 

There are two options:

 1. If PAYE will be deducted by the agency or an umbrella company, then
continuing passing invoices as before

 

 2. If you do not get confirmation that PAYE is being deducted, then write
to the worker explaining that we will deduct PAYE from future
payments. (as draft attached).

 

This is a rather complicated set of arrangements for, probably only a few
people, however, the HMRC are keen to close a current tax avoidance
loophole and we have to make sure that our procedures are robust.

 

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