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IR35: recovery of PAYE from other parties

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HMRC has published regulations under ITEPA 2003 s 688AA which provides the framework for the recovery of deemed employer PAYE from ‘a relevant person’. The Income Tax (Pay As You Earn) (Amendment No. 3) Regulations, SI 2020/1150 achieve this by adding new Part 4 Chapter 5 into the PAYE regulations (SI 2003/2682).

Where a deemed employer has failed to make income tax deductions under PAYE from payments made to an off-payroll worker, and there is no realistic prospect of recovering the outstanding tax from the deemed employer within a reasonable period, the regulations will allow HMRC to recover the tax from other parties within the labour supply chain. The new provisions will apply from 6 April 2021, alongside the extension of the reformed IR35 rules to medium and large organisations in the private sector.

HMRC has produced a new factsheet setting out support available to businesses which will be affected by the changes to the off-payroll working rules from 6 April 2021. The factsheet provides a table of support options for businesses and advisers, with links to the most relevant guidance. HMRC has also updated its Important facts for contractors guidance – part of its collection of resources to help advisers communicate with clients on the April 2021 changes (available via:

Issue: 1507
Categories: News