Employment status, off-payroll working, sole traders

12 May 2022      Julia Ascott, Employment Taxes Specialist

Training and managing off-payroll working risks

This KPMG article looks at the importance of training to manage any off-payroll working (OPW) compliance risks.  Once you’ve read through this article and want to ensure your staff are up to date with their OPW knowledge, BUFDG ran a free training session for universities earlier this year looking at the OPW rules, along with the assessment of sole traders who don’t fall within the OPW rules.  The BUFDG training was specifically run to ensure that universities met their requirements in training staff and is available to rewatch here.

Incidentally, HMRC have also updated links to recorded webinars to get help with the OPW rules.

Kickabout kicked out

The Court of Appeal has upheld the judgement of the Upper Tribunal (see our summary) in R&C Commrs v Kickabout Productions Ltd on the basis that the hypothetical contract did include necessary control and mutuality of obligation and that the Upper Tribunal had not made any error in principle. 

HMRC wins appeal over Kaye Adams

The Court of Appeal has upheld an appeal by HMRC against the Upper Tribunal’s decision in R&C Commrs v Atholl House Productions Ltd (Kaye Adam’s personal service company).  Whilst the appeal was allowed, the Court of Appeal declined to decide on the case and instead sent it back to the Upper Tribunal for reconsideration.

Exclusivity clauses

You may have seen the government’s response to the consultation on exclusivity clauses in employment contracts. Legislation will be introduced to ban exclusivity clauses (making them unenforceable) where guaranteed weekly income is at or less than the Lower Earnings Limit (currently £123 per week). 

Exclusivity clauses have often been cited as a determining factor in employment status checks; where an individual is only permitted to work with the engager, it is an indicator of employment rather than self-employment.  This change will certainly muddy the waters a little, but not to a significant effect given that it will only apply to low paid individuals.

Peers call for more research on impact of off-payroll reforms

The CIOT reported on the peers debate of 27 April where the majority of peers expressed their doubts about CEST, unfairness in denying individuals employment rights, revenue raising being the driver of change, unscrupulous rogue umbrella companies and the lack of legal route to appeal against engager’s decisions.

Read more

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