Off-payroll working from April 2021

Are you ready for the new regime?

From 6 April 2021, medium and large private sector organisations – as well as all public sector bodies – must assess the ‘IR35’ status of engagements with workers who operate through intermediaries (such as personal service companies).

This will determine the payroll treatment of payments made to the contractor. If the end user of the intermediary does not exercise reasonable care in assessing the status of the engagement, any underpaid PAYE and NIC could become its responsibility.

For the public sector, this is similar to the current system – but with additional responsibilities and risks.  For affected private sector organisations, this is an entirely new regime.

What are the challenges?

Heavy reliance on contingent labour and complex supply chains can make it challenging to:

  • Identify contractor populations likely to be affected;
  • Apply nuanced case law rules to complex engagements;  
  • Manage costs and retention where the new rules apply; and
  • Resource a major change project through to ‘business as usual’.

How KPMG can help

KPMG has supported some of the UK’s largest organisations in resolving employment status disputes. 

We’ve applied this experience in developing a modular Off-Payroll Management (‘OPM’) solution to address the key challenges of the new regime.

Our OPM – Portal provides a customisable access point to manage and review your contractor population.  It houses key documentation such as policies, processes and procedures, contractor details and contracts.

The OPM – Identification module identifies engagements at risk of falling within the off-payroll working rules, assigns a risk rating and models the associated costs.

Our OPM – Assessment module, which can be configured for specific requirements, assesses individual engagements based our practical experience of how the tests apply and issues a status determination statement.

OPM – Workflow maintains a full audit trail of the decision making process.  It demonstrates that care has been taken when assessing the engagement’s status in order to evidence compliance.  OPM – Workflow also manages disputes and communicates status decisions.

With any system, support is important to provide a high level of on-going service. We are able to provide a number of support services and can discuss these with you as part of your broader system configuration requirements. For more details, download our briefing document.

If you have any queries, or would like to discuss how KPMG can assist you, please get in touch with Matthew Hunnybun, Colin Ben-Nathan or your usual KPMG contact.