Link to the FD3 form
Background
The Off-Payroll Working (OPW) rules are pieces of anti-avoidance legislation which were introduced in response to the perceived failure of the IR35 rules. When the OPW rules were introduced, it was stated that they were designed to ensure parity, as regards the amount paid in Income Tax and National Insurance contributions, between individuals who are employed and those who provide their services via an intermediary (e.g. a limited company).
Where HMRC criteria are met, the University will need to deduct PAYE and National Insurance from invoiced payments. As a result, the Department may also have to pay the employer liability, approximately 15% of the cost of employing such individuals. Departments must follow the FD3 process
Update
On Friday 23rd September, in a surprising move, the Chancellor of the Exchequer announced the repeal of the Off Payroll Working legislation, with effect from April 2023. Currently there is no official documentation detailing the impact of the change.
What does this mean for the University?
In the immediate term, there are no impacts for the University. All of our current policies and processes will apply until April 2023.
We will be keeping a close eye on developments to ensure that any necessary changes are implemented. In the meantime, should you have any queries, please contact the Employment Tax Team.