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E4.1040 Services provided to public sector or medium or large private sector clients

In order to improve compliance with the regime governing the provision of services through an intermediary, provisions governing services provided via intermediaries were amended. These amendments apply to the public sector from April 2017¹ and to the private sector where clients are 'large or medium sized' from April 2021 (via legislation introduced in FA 2020 and FA 2021 for tax and SI 2020/1220 for NIC). This is commonly referred to as the off-payroll working rules. The main effect is to shift the responsibility for operating the intermediary rules from the individual worker's intermediary to the client, agency, or third party paying the intermediary. Note that these off payroll rules apply in priority to the intermediary (IR35) rules² and those relating to managed service companies.

In addition to extending the rules into the private sector, from April 2021 changes are made to the operation and compliance requirements of the rules. HMRC published guidance aiming to help