It sets out how the government intends to operate with the self-employed. It is possible that this method of working could apply to both the private and public sectors; however, the consultation emphasises that this is for public sector ‘off-payroll engagements of workers’.
The consultation is open until 18 August. There will then be a period of post-consultation analysis and a further technical consultation will take place with legislation expected to apply from April 2017. This is clearly an ambitious timeframe that would leave many organisations and their software providers little time to change their systems.
The key change is that the ‘liability to pay the relevant employment taxes will move to the engager or the agency supplying the worker. This means public sector organisations and agencies supplying workers to the public sector will be responsible for:
deciding if the rules apply; and
calculating, reporting and paying the relevant taxes if they do.’
HMRC can then decide whether it feels the rules have not been followed, and who is liable for any taxes and penalties.