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Lords committee investigates the extension of off-payroll working rules

4 February 2020

The House of Lords Finance Bill Sub-Committee today invites contributions to its inquiry on the draft Finance Bill 2019–20.

The deadline for the submission of written evidence is 25 February 2020.

The focus of the inquiry

In scrutinising the draft Bill, the Sub-Committee will focus on the Government's proposal to extend the off-payroll working rules –  which were introduced for the public sector in 2017 – to large and medium-sized organisations in the private sector from April 2020.

The proposal would mean that businesses will be responsible for deciding whether contractors they hire are liable to pay income tax and national insurance contributions, and if so, for paying those sums.

This inquiry will cover:

Existing measures in the public sector

  • What has been the experience of the new rules in the public sector?
  • What lessons have been learned from this experience, and how have they affected the Finance Bill proposals?

Impact of the new rules on organisations

  • Has the impact of the extension of the rules to the private sector been adequately assessed?
  • Is the exclusion of small organisations sufficiently robust?
  • What effect will these new measures have on a chain of contractors and sub-contractors?
  • What should HMRC do to help businesses understand the new administrative rules?

Determining tax status of workers

  • Are the tests for determining employment for the purposes of these rules sufficiently clear to both engager and worker?
  • What is your assessment of the Check Employment Status for Tax (CEST) tool?
  • Does the CEST require improvement? If so, how might it be improved?

Policy objectives

  • In your opinion, are there better or simpler ways in which the objective of the new rules might be achieved?
  • Will the Bill, as drafted, achieve the Government's objectives?

Chairman's Comments

Lord Forsyth of Drumlean, Chair of the Finance Bill Sub-Committee, said:

"The Government is proposing to extend the off-payroll working rules to large and medium-sized organisations in the private sector. We are interested in how this change will work in practice, and how it relatesto wider changes in working arrangements.

"To inform our work we want to hear from as broad a range of people and organisations as possible. If you have a view on off-payroll working rules, please let us know what you think."

Further information