Off-payroll workers miss out on statutory pay

Off-payroll and statutory pay. Since 6 April 2021 the responsibility for deciding if IR35 applies and accounting for the resulting tax and NI, shifted from the workers to the businesses etc. (except for SMEs) they work for. This is bringing more workers within the PAYE tax and NI net and potentially entitlement to statutory payments such as maternity pay. The new responsibility on businesses etc. paying off-payroll workers does not make them liable for statutory pay, but workers may be entitled to them through their own companies etc.

Example. Jane owns a company through which she provides services to several clients. Some work is subject to the off-payroll rules and her company is paid for it net of PAYE tax and NI, which it passes to Jane. The off-payroll NI (and tax) won’t show in Jane’s company’s payroll records. However, it does mean that if she doesn’t work because of illness she might qualify for statutory sick pay.

Tip. HMRC has issued new guidance on how Jane and her company should tackle such situations and work out if and how much statutory pay she is entitled to.

If you work through your own company or other intermediary and your clients deduct tax and NI under the off-payrolls rules, it might entitle you to statutory payments such as sick pay. Refer to HMRC’s new guidance on how to calculate this.

Advisory fuel rates updated

New rates. HMRC has updated its advisory fuel rates (AFRs) for company cars from 1 June 2021. The old rates (shown in brackets n the table below) can be used until 30 June 2021. To avid a car fuel benefit charge, employers and employees can compensate each other at the appropriate AFR for the cost of fuel paid for by the other.

HMRC’s advisory fuel rates changed slightly for some vehicles on 1 June 2021. The old rates (shown in brackets in the table below) can be used until 30 June 2021.