There's been lots in the press recently about television presenters being faced with large bills from HMRC for income tax and national insurance contributions. That's not to say that everyone who is working on a self-employed basis should actually be on payroll. Lorraine Kelly, for example, was sure that she was self-employed and has recently been successful in demonstrating that she is correctly categorised.
Assuming the Government doesn't change things, in April 2020 any business in the private sector which uses freelancers will be responsible for determining whether the freelancer is self-employed or, actually, an employee. The feeling is that most businesses may take a conservative approach to this and those paid off-payroll who aren't clearly self-employed will be brought into the PAYE and NICs regime.
This change won't apply to small businesses, which are those who can satisfy two of the following:
• Annual Turnover of less than £10.2 million
• Balance sheet total less than £5.1 million
• Number of employees less than 50
Whatever size of business you are, if you use freelancers in your business, have a look at HMRC's employment status checker (https://www.gov.uk/guidance/check-employment-status-for-tax) and speak to your advisers to discuss whether your self-employed workers are correctly categorised and what impact these changes could have on you.
The Government plans to introduce new legislation from April 2020 to help tackle the perceived abuse of tax and national insurance contributions (NIC) relating to off-payroll labour in the private sector. The change will affect medium and large private sector businesses that engage workers operating through an intermediary and extends the rules that are in place for the public sector since April 2017. The new rules will not apply to small businesses (as defined by Companies Act 2006).