Clio SpringerEditor's message: PAYE generally applies only to employees. However, there are circumstances where individuals who might not immediately appear to be employees are subject to income tax and national insurance contributions (NICs). Where an individual provides their services to a client via an intermediary such as a personal service company (an arrangement known as "off-payroll working"), but the relationship with the client would otherwise suggest employment status, then IR35 (also known as the "intermediaries legislation"), is likely to apply. If it does, the intermediary must operate PAYE and deduct income tax and NICs on salary paid to the individual.

Since April 2017, where the client is in the public sector, it has responsibility for determining if IR35 applies where the individual provides their services via an intermediary. If they would otherwise be regarded as an employee if the arrangement was not through their intermediary, the public-sector client must make PAYE deductions.

The Government intends to introduce the same requirements on private-sector clients from 6 April 2020 (although small businesses will be exempt). The client receiving the off-payroll workers' services will be responsible for deciding the individual's status and operating IR35, rather than the individual who is being engaged.

Following the general election, the Government is carrying out a review of the changes to off-payroll working, but it has confirmed that the reforms are still due to go ahead.

Clio Springer, senior employment law editor

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