ESM10001 | off-payroll working legislation: Chapter 10, ITEPA 2003 (from 6 April 2021): basic principles: public authorities: when the off-payroll working legislation applies and commencement

Section 61M Chapter 10, Part 2 ITEPA 2003

Regulation 13 Social Security Contributions (Intermediaries) Regulations 2000

Note – Any reference to a public authority on this page only is to a public authority as defined by section 61L Chapter 10, Part 2 ITEPA 2003 prior to 6 April 2021, not the amended definition that applies from 6 April 2021. See ESM10005 for details.

For public authorities the legislation applies where all of the following are met:

• an individual (‘the worker’) personally performs, or is under an obligation to personally perform, services for another person (‘the client’), who is a public authority (listed in a) to f) in ESM10005)

• the services are provided not under a contract directly with the client but through a third party (known as an intermediary),

• the circumstances are such that if the contract had been made directly between the client and the worker then the worker would be:

  • regarded as an employee of the client or the holder of an office under the client; or the worker is an office holder who holds that office under the client and the services relate to that office,

• payment for the services is made on or after 6 April 2021, and

• one of the conditions of liability is satisfied according to the type of intermediary (see ESM10003).

Statutory auditors

Holding office as a statutory auditor of the client does not count as holding office under the client for these purposes. Here ’statutory auditor’ means a statutory auditor within the meaning of Part 42 Companies Act 2006. Further guidance on the meaning of office holder can be found at ESM2500 onwards.

Commencement

For public authorities that were within the scope of Chapter 10, Part 2 ITEPA 2003 prior to 6 April 2021, the new rules will apply to payments made on or after 6 April 2021 regardless of when work was carried out (see those listed in a) to f) in ESM10005).

Example

Jennifer provides her services to a public authority from 16 March 2021 to 5 April 2021 and is paid for this work on 6 April. Jennifer operates through a PSC and would be employed if engaged directly. The full amount of the payment would be subject to the new off-payroll working rules.

Compliance checks into Intermediaries under Chapter 8, Part 2 ITEPA 2003 for years before 6 April 2021

HMRC have taken the decision that they will only use information resulting from the new off-payroll working rules to open new compliance checks into returns for earlier years under Chapter 8, Part 2 ITEPA 2003 if there is reason to suspect fraud or criminal behaviour (see ESM10036).