The off-payroll working rules are unlikely to apply if you are employed by an umbrella company.

What happens if the rules apply?

The party responsible for applying the rules must determine whether the worker is employed for tax purposes. You can use the check employment status for tax (CEST) tool to help you make this determination.

A worker’s employment status for tax determines the taxes the worker and the deemed employer need to pay, depending on whether a worker is determined as employed or self-employed.

The off-payroll working rules apply on a contract-by-contract basis. A worker may have some contracts which are within the off-payroll working rules and some which are not. A contract for the purpose of the off-payroll working rules is a written, verbal, or implied agreement between parties.

If the rules apply, the client is responsible for determining the worker’s employment status for tax, and they should produce a status determination statement (SDS) including the reasons for their determination.

If the worker is deemed to be employed for tax purposes, the deemed employer must deduct Income Tax and employee National Insurance contributions from fees paid to the worker’s intermediary. Employer National Insurance contributions and Apprenticeship Levy, if applicable, must be paid to HMRC by the deemed employer.