Letter re off-payroll from HMRC

Dave Chaplin made this Freedom of Information request to University of Strathclyde as part of a batch sent to 207 authorities

This request has been closed to new correspondence from the public body. Contact us if you think it ought be re-opened.

The request was successful.

Dear University of Strathclyde,

The Off-payroll legislation was introduced in Chapter 10 of the Income Tax (Earnings and Pensions) Act 2003, with the new legislation going live from April 6th 2017. This new legislation overrode, in the public sector, the existing Intermediaries Legislation (Chapter 8, ITEPA).

The new legislation is here:
https://www.legislation.gov.uk/ukpga/201...

Around July 2018 HMRC sent your body a letter asking for information related to “Checking compliance with the rules from April 2017”

For easy identification, a copy of the letter is as follows:

-- Letter start --

Off Payroll Reform in the Public Sector
Section 61M Chapter 10 ITEPA 22003 and Regulation 13 Social Security (Miscellaneous Amendments No.) Regulations 2017

Following the introduction of chapter 10 ITEPA 2003 and certain amendments to chapter 8 ITEPA 2003 (“IR35”), new rules apply in relation to off-payroll working in the public sector from 6 April 207. Where individuals work and are paid through their own intermediary, public authorities as defined in the legislation) are now responsible for deciding whether the rules apply. Where a person is assessed as being with the new rules, the public authority agencies and third parties paying the fee for the services of the worker must operate tax, NICs and operate the Apprenticeship Levy.

I would like to check your compliance with the new legislation, including any systems you have introduced to help you decide whether the offpayroll rules should apply when engaging workers via their own intermediary (either directly or via an agency or other labour provider). Such an intermediary will often be a ‘personal service company’, but as the legislation also applies where a worker is engaged via a partnership or another person, I will use the terms ‘PSC or other intermediary’ and ‘PSC etc’ in this letter.

I have listed the information we need below and would be grateful for your response by 31 August 2018. If the amount of information I have requested will make this difficult, please contact me to discuss how this can be managed.

Checking compliance with the rules from April 2017

1. Please describe the steps you took prior to April 2017:
i. to review the off-payroll engagement of PSCs or other intermediaries, to decide whether the off-payroll rules would apply
ii. please include an explanation of any different or additional steps taken in relation to PSCs etc that you engaged via an agency or other labour provider.

2. If different from 1 above, please describe the systems / processes currently in place to decide whether the off-payroll rules apply to PSCs etc, whether you engage them directly or via an agency or other labour provider. Please provide a copy of any internal guidance / operating procedures for your staff, and comment on:
i. who is responsible for carrying out the checks and approving decisions
ii. whether the Check Employment Status for Tax tool (CEST) is used to inform decisions as to whether the rules apply, and
iii. how you ensure compliance where the PSC is engaged via an agency or other labour provider.

3. For the tax year 2107/2018, if you directly engaged with and paid any worker’s own PSC or other intermediary, please tell us:
i. the total number of such PSCs etc that you engaged directly
ii. the number of such PSCs etc that you decided were within the scope of the legislation
iii. if different from (ii), the number of such PSCs etc that have been subject to deduction of tax and NIC and included in an RTI submission
iv. the number of such PSCs etc that you decided were outside the scope of the legislation
v. the names, addresses and a brief description of the worker role / nature of services provided by the PSCs etc within (iv) above.

4. For the tax year 2017/18, if you were invoiced by any agency or other labour provider for services via a worker’s own PSC or other intermiary, please provide the name of each such agency or other labour provider and, or each of them, please tell us:
i. the total number of such PSCs etc supplied by that agency / labour provider
ii. the number of such PSCs etc that you decided were within the scope of the legislation
iii. whether you told the agency / labour provider that the rules applied for every PSC etc within (ii) above and if not, please explain why not)
iv. the number of such PSCs etc, that you decided were outside the scope of the legislation
v. the name, addresses and a brief description of the worker role / nature of services provided by the PSCs etc within iv) above.

5. Please identify any workers / PSCs etc that you decided were within the off-payroll rules, which have subsequently been engaged / paid via umbrella companies. Do you have any policy in place that encourages the use of umbrella companies for those found to be within the rules?

6. For those not working through umbrella companies, have any workers that previously worked through their own PSC etc subsequently entered into employment contracts with your group?

7. The offpayroll rules do not apply where a public authority has fully contracted out servicces to a third party e.g. an outsourcing company operating under a contract where the workers do not personally provide their services to the public authority. If you believe this applies to you, please provide an explanation for the affected contract(s).

More information about the check

I enclose factsheet CC/FS1c ‘General information about compliance checks into certain large and complex businesses’. Please take time to read this, it gives you more information about this type of check. I also enclose factsheet CC/FS22 ‘Sending us electronic records’.

If you have any questions, please contact me using the details shown at the top of this letter.

-- Letter end --

Please can you provide:

1. Confirmation as to whether you received the letter
2. Confirmation as to whether you responded to the letter to HMRC.
3. Confirmation as to whether you provided ANY or all of the information to HMRC.
4. A copy of your response to that letter with the following direction: Instead of the exact answers for 3(v) and 4(v) (which are likely to be confidential) please instead tell us the number of items on those lists.

If the FOI time limit of 3.5 hours is such that not all of these records can be obtained in the time limit of 3.5 hours, then please provide as much as possible until the time limit is reached. Thank you.

Yours faithfully,

Dave Chaplin

FOI Strathclyde, University of Strathclyde

1 Attachment

Dear Dave Chaplin,

 

FOI Request Reference – 2019/010

 

Thank you for your email below requesting information under the Freedom of
Information (Scotland) Act 2002.

 

The University acknowledges receipt of this request and will respond as
soon as possible and within 20 working days of the day your request was
received.  You will hear back from us by 12 February 2019 at the latest. 
The Information Governance Unit will contact you if we require any further
information.

 

Yours sincerely,

 

Information Governance Unit

University of Strathclyde

 

 

[1]cid:image001.png@01D25AD0.C13D6790

 

The University of Strathclyde is a charitable body, registered in
Scotland, number SC015263

 

 

Dear University of Strathclyde,

 

The Off-payroll legislation was introduced in Chapter 10 of the Income Tax
(Earnings and Pensions) Act 2003, with the new legislation going live from
April 6th 2017. This new legislation overrode, in the public sector, the
existing Intermediaries Legislation (Chapter 8, ITEPA).

 

The new legislation is here:

https://www.legislation.gov.uk/ukpga/201...

 

Around July 2018 HMRC sent your body a letter asking for information
related to “Checking compliance with the rules from April 2017”

 

For easy identification, a copy of the letter is as follows:

 

-- Letter start --

 

Off Payroll Reform in the Public Sector

Section 61M Chapter 10 ITEPA 22003 and Regulation 13 Social Security
(Miscellaneous Amendments No.) Regulations 2017

 

Following the introduction of chapter 10 ITEPA 2003 and certain amendments
to chapter 8 ITEPA 2003 (“IR35”), new rules apply in relation to
off-payroll working in the public sector from 6 April 207. Where
individuals work and are paid through their own intermediary, public
authorities as defined in the legislation) are now responsible for
deciding whether the rules apply. Where a person is assessed as being with
the new rules, the public authority agencies and third parties paying the
fee for the services of the worker must operate tax, NICs and operate the
Apprenticeship Levy.

 

I would like to check your compliance with the new legislation, including
any systems you have introduced to help you decide whether the offpayroll
rules should apply when engaging workers via their own intermediary
(either directly or via an agency or other labour provider). Such an
intermediary will often be a ‘personal service company’, but as the
legislation also applies where a worker is engaged via a partnership or
another person, I will use the terms ‘PSC or other intermediary’ and ‘PSC
etc’ in this letter.

 

I have listed the information we need below and would be grateful for your
response by 31 August 2018. If the amount of information I have requested
will make this difficult, please contact me to discuss how this can be
managed.

 

Checking compliance with the rules from April 2017

 

1.            Please describe the steps you took prior to April 2017:

i.              to review the off-payroll engagement of PSCs or other
intermediaries, to decide whether the off-payroll rules would apply

ii.             please include an explanation of any different or
additional steps taken in relation to PSCs etc that you engaged via an
agency or other labour provider.

 

2.            If different from 1 above, please describe the systems /
processes currently in place to decide whether the off-payroll rules apply
to PSCs etc, whether you engage them directly or via an agency or other
labour provider. Please provide a copy of any internal guidance /
operating procedures for your staff, and comment on:

i.              who is responsible for carrying out the checks and
approving decisions

ii.             whether the Check Employment Status for Tax tool (CEST) is
used to inform decisions as to whether the rules apply, and

iii.            how you ensure compliance where the PSC is engaged via an
agency or other labour provider.

 

3.            For the tax year 2107/2018, if you directly engaged with and
paid any worker’s own PSC or other intermediary, please tell us:

i.              the total number of such PSCs etc that you engaged
directly

ii.             the number of such PSCs etc that you decided were within
the scope of the legislation

iii.            if different from (ii), the number of such PSCs etc that
have been subject to deduction of tax and NIC and included in an RTI
submission

iv.           the number of such PSCs etc that you decided were outside
the scope of the legislation

v.            the names, addresses and a brief description of the worker
role / nature of services provided by the PSCs etc within (iv) above.

 

4.            For the tax year 2017/18, if you were invoiced by any agency
or other labour provider for services via a worker’s own PSC or other
intermiary, please provide the name of each such agency or other labour
provider and, or each of them, please tell us:

i.              the total number of such PSCs etc supplied by that agency
/ labour provider

ii.             the number of such PSCs etc that you decided were within
the scope of the legislation

iii.            whether you told the agency / labour provider that the
rules applied for every PSC etc within (ii) above and if not, please
explain why not)

iv.           the number of such PSCs etc, that you decided were outside
the scope of the legislation

v.            the name, addresses and a brief description of the worker
role / nature of services provided by the PSCs etc within iv) above.

 

5.            Please identify any workers / PSCs etc that you decided were
within the off-payroll rules, which have subsequently been engaged / paid
via umbrella companies. Do you have any policy in place that encourages
the use of umbrella companies for those found to be within the rules?

 

6.            For those not working through umbrella companies, have any
workers that previously worked through their own PSC etc subsequently
entered into employment contracts with your group?

 

7.            The offpayroll rules do not apply where a public authority
has fully contracted out servicces to a third party e.g. an outsourcing
company operating under a contract where the workers do not personally
provide their services to the public authority. If you believe this
applies to you, please provide an explanation for the affected
contract(s).

 

More information about the check

 

I enclose factsheet CC/FS1c ‘General information about compliance checks
into certain large and complex businesses’. Please take time to read this,
it gives you more information about this type of check. I also enclose
factsheet CC/FS22 ‘Sending us electronic records’.

 

If you have any questions, please contact me using the details shown at
the top of this letter.

 

-- Letter end --

 

Please can you provide:

 

1.            Confirmation as to whether you received the letter

2.            Confirmation as to whether you responded to the letter to
HMRC.

3.            Confirmation as to whether you provided ANY or all of the
information to HMRC.

4.            A copy of your response to that letter with the following
direction: Instead of the exact answers for 3(v) and 4(v) (which are
likely to be confidential) please instead tell us the number of items on
those lists.

 

If the FOI time limit of 3.5 hours is such that not all of these records
can be obtained in the time limit of 3.5 hours, then please provide as
much as possible until the time limit is reached. Thank you.

 

Yours faithfully,

 

Dave Chaplin

 

 

References

Visible links

FOI Strathclyde, University of Strathclyde

2 Attachments

Dear Mr Chaplin,

 

FOI Request Reference – 2019/010

 

Thank you for your email of 15 January 2019 requesting information under
the Freedom of Information (Scotland) Act 2002.

 

Please find the University’s response attached.

 

 

 

Yours sincerely,

 

Information Governance Unit

University of Strathclyde

 

[1]http://www.strath.ac.uk/media/1newwebsit...

 

The University of Strathclyde is a charitable body, registered in
Scotland, number SC015263

 

 

 

 

 

 

 

 

 

References

Visible links