24 October 2019 
Caroline Jones, Employment tax director
Earlier this week HMRC issued guidance on the off-payroll working changes from 6 April 2020, which will affect the HE sector.
It is estimated that, in the private sector, only one in 10 people who should be paying tax under the current off-payroll working rules are doing so correctly. HMRC’s aim is to level the playing field between those who were applying the rules and those who were not by extending the rules that currently apply in the public sector to larger businesses in the private sector. As part of this ‘widening of the net’ HMRC is also taking the opportunity to increase compliance obligations for the engager and these changes will have an effect for HEIs.
Main changes
Once you have decided the employment status of a worker, you will need to:
If you are also the fee-payer and the off-payroll working rules apply, as now, you will need to deduct and pay tax and National Insurance contributions to HMRC.
What this means for HEIs is that you will need to extend your processes so that where there is an agency (or agencies) in the supply chain between the university and worker, you will be responsible for passing the determination down that supply chain to the worker. This means that you will need to understand the whole supply chain. The dispute led process also presents some challenges as it will be up to the HEI to ensure that it complies with the requirements of any dispute.
Check Employment Status for Tax (CEST)
HMRC has also announced that a new, updated version of CEST will be available by the year end and this has been designed in conjunction with 300, or so, stakeholders. The resulting tool should be more user friendly than the recent versions.
