Off-Payroll Working-Offsets
Steve Wade
Partner - PAS Tax at EY | Chartered Tax Advisor | Expatriate and Employment Taxes
Clause 17 of the Finance Bill when enacted will enable HMRC to make regulations to enable HMRC:
"to reduce the PAYE liability of a deemed employer, where that engagement was incorrectly treated as self-employed for tax purposes. This would account for tax and National Insurance contributions already paid by a worker and their intermediary on payments received from an off-payroll working engagement.
The changes will take effect from 6 April 2024."
A note explaining the full background to this measure explains that:
"The objective of this policy is to address a potential over-collection of tax and National Insurance contributions by HMRC and resolve an unfairness in the tax system. This will be achieved by allowing?HMRC?to set off taxes estimated to have already been paid by the worker or their?intermediary?against a deemed employer’s subsequent?PAYE?liability, ensuring that the cost of the liability is shared more fairly between the deemed employer and the worker."
There isn't a great amount of time to have the regulation published for consultation and introduced into legislation to meet the deadline of 6 April 2024.
We are expecting the draft regulations to be issued very shortly and at the latest early in the New Year. Christmas reading for tax advisors from HMRC?