A single determination of tax and NIC would simplify the offsetting process. The deemed employer should have the right to appeal against a determination.

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ICAEW’s Tax Faculty has responded to HMRC’s consultation on draft legislation and guidance relating to changes to the off-payroll working (IR35) rules.  

The draft legislation allows HMRC to direct that a deemed employer’s (the payer’s) PAYE liability may be reduced by income tax and national insurance contributions (NIC) paid by a worker and/or their intermediary (the payee). The amount offset is HMRC’s best estimate. The payee has the right to appeal against the direction.  

Tax Faculty has recommended that a single determination covering both tax and NIC should be made. The draft legislation appears to suggest that income tax and NIC should be set off separately.  Deeming NIC to be a tax for this purpose would simplify the offsetting process, especially if tax is an overpayment and NIC an underpayment, or vice versa. 

Further, Tax Faculty recommends that the payer is given the right to appeal against the determination, and that HMRC explains how it has arrived at its best estimate of the tax and NIC to be offset.  

See also ICAEW’s webpage Off-payroll working and IR35. 

ICAEW’s Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.


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