ESM10011A | off-payroll working legislation: Chapter 10, ITEPA 2003 (from 6 April 2021): basic principles: duty for client to confirm its size upon request

Section 60H Chapter 10, Part 2 ITEPA 2003

If a worker or the person a client contracts with is uncertain about the size of its client for a particular engagement it can formally request confirmation from the client. Knowing the size of the client will provide the certainty workers and other parties in the contractual chain need to understand whether Chapter 10, Part 2 ITEPA 2003 may apply.

The worker or person the client contracts with can ask the client to confirm its size if the engagement with the client meets conditions (a) to (b) in section 49(1) ITEPA 2003. Those conditions are:

• the worker personally performs, or is under an obligation to perform, services for the client,

• the client is not a public authority, and

• the services are provided not under a contract directly between the client and the worker, but under arrangements involving a third party (‘the intermediary’).

The request should make it clear to the client that the worker or the person the client contracts with is making the request for it to confirm its size under the off-payroll working rules in Chapters 8 and 10, Part 2 ITEPA 2003 and which tax year the request relates to. The client’s response should confirm its size for the tax year, and be made in accordance with the size criteria within the off-payroll working rules (see ESM10006 - ESM10009).

The client has 45 days from the date of receiving the request to confirm its size. The end of the 45 days is the later of:

• the end of the period of 45 days beginning with the date the client receives the request, or

• 45 days prior to the start of the tax year specified in the request.

If the client confirms they are medium or large and so the engagement is within the scope of Chapter 10, Part 2 ITEPA 2003, the worker will know they do not have to operate Chapter 8, Part 2 ITEPA 2003.

If the client confirms they are small and so the engagement is not within scope of Chapter 10, Part 2 ITEPA 2003, the worker will know they must consider Chapter 8, Part 2 ITEPA 2003.

If the client does not respond confirming its size within 45 days of receipt, the requestor can apply to the courts for an injunction (or an order for specific performance in Scotland), requiring the client to provide the information which will come with consequences if not adhered to.