Agents told to prepare for new off-payroll working rules

ARLA Propertymark is advising agents to get up to speed on new rules - and possible higher costs - when changes to off-payroll working rules come into effect in April. 

Propertymark says the new rules mean some agents will be responsible for the status of workers paid through an intermediary such as a personal service company, for income tax purposes.

“Agents engaging the services of such workers must decide whether, if you ignored the existence of the intermediary, the worker would be regarded as a direct employee. If the answer is yes, the agent (as the client) must deduct income tax and National Insurance contributions from the fees paid for the services” advises Propertymark.

It says the change to IR35 apply to all public sector organisations and private sector firms that meet two or more of these criteria - an annual turnover of more than £10.2m, a balance sheet total of more than £5.1m, has over 50 employees, is not a limited liability partnership, not an unregistered company, and not an overseas company.

If an agency meets two or more of those criteria, there will be new responsibilities and costs. 

ARLA says: “This includes providing a statutory status determination statement to the worker, and any third parties, which communicates your decision as to their employment status. This UK Government factsheet outlines the impact of the changes for businesses that meet the criteria.” 

Additional costs will include National Insurance contributions and, where applicable, the apprenticeship levy.

The association’s advice continues: “For businesses that do not meet two or more of the above criteria, the responsibility for applying IR35 will remain with the intermediary. For small agency businesses, these changes will only impact the engagement of 3rd Party ‘professional’ services not currently caught by the Construction Industry Scheme."