How do I identify a new starter within Cintra Cloud as an off payroll worker?

Modified on Sat, 7 Dec, 2024 at 5:55 PM

The Off Payroll Working rules are designed to ensure that people working through a Personal Service Company (PSC), would be regarded as employees if they are directly engaged by the client, and pay broadly the same income tax and NICs as if they are employed.

The Finance Act 2017 introduced reform on how the Off Payroll Working rules operate in the public sector from 6 April 2017. From April 2017, if the rules apply, and the public authority is directly engaging the worker’s PSC, the public authority is required to deduct the relevant income tax and NICs before making any payments. If the worker is engaged through an agency, the public authority will pass on their decision and the agency paying the worker’s PSC is required to deduct the relevant income tax and NICs before making any payments. The party paying the worker’s PSC is also responsible for paying employer NICs for the engagement.

The autumn Budget 2018 announced the extension of the Off Payroll Working rules to medium and large-sized organisations in the private sector from April 2020, later postponed to April 2021.

The extension does not apply to small organisations that are either:

A small incorporated company (subject to the Companies Act 2006) meeting two of the following criteria: fewer than 50 employees, annual turnover of less than £10.2m or total balance sheet assets of less than £5.1m.
A small unincorporated organisation with an annual turnover of less than £10.2m.

Within Cintra Cloud, you can include Off Payroll Workers in your company's payroll for Tax, National Insurance Contributions and Apprenticeship Levy purposes.

Important:

It is mandatory that you fill in the employee's IR35 Off Payroll Worker status within Cintra Cloud's New Starter template.

Note:

Off Payroll Workers cannot claim Statutory Payments (SSP, SAP, ShPP, SMP, SPP, SPBP). They are also not liable to Auto Enrolment in a Pension Scheme or the deduction of Student or Postgraduate Loans. For full guidance, see https://www.gov.uk/guidance/understanding-off-payroll-working-ir35

Note:

For more information about IR35, see https://www.gov.uk/topic/business-tax/ir35.

Identify the new starter as an off payroll worker

Determine if the New Starter should be treated as a deemed employee.
You can check the worker's Employment Status for tax by using HMRC’s free Check Employment Status for Tax (CEST) tool. It will help you decide if the Off Payroll Working (IR35) rules apply to the New Starter's contract.
Go to : https://www.gov.uk/guidance/check-employment-status-for-tax
Inform the worker that you have determined their status and give them the opportunity to appeal.

Download the spreadsheet template

Log in to Cintra Cloud.
Select the desired Payroll.
Click the New Starters button.
Click the Download Template button. The spreadsheet opens.
Enter the relevant data for the employees.

Define within the template whether the employee is an off payroll worker

Navigate to the IR35 Payroll Worker column.
Enter either of the following for the relevant employees:

Y: Yes, the New Starter is identified as an Off Payroll Worker.
N: No, the New Starter is identified as not an Off Payroll Worker.

Save the spreadsheet.
Continue to re-import the spreadsheet back into Cintra Cloud.

Note:

The Off Payroll Working status will be reported to HMRC in FPS Transmissions.

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