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2451828 - PY-GB: Off-payroll working in the public and private sector: reform of intermediaries legislation


Version Management:

v1: First release
v2: See section "Update: November 2018"
v3: See section "Update: September 2019"
v4: See section "Update: January 2020"

From April 2017 there are changes to the way the current intermediaries legislation (known as IR35) is applied to off-payroll working in the public sector. Where the rules apply, people who work in the public sector through an intermediary will pay employment taxes in a similar way to employees.

These changes will apply to:

  • public authorities who hire off-payroll contractors
  • public sector tax managers, payroll managers, human resources managers and procurement managers
  • agencies and third parties who supply contractors to the public sector
  • contractors who provide their services to a public authority through an intermediary

The reform applies to payments made on or after 6 April 2017, including payments made for contracts entered into before that date.

Where the rules apply, the fee-payer (the public authority, agency, or other third party paying the intermediary) will calculate Income Tax and primary (employee) National Insurance contributions (NICs) and pay them over to HMRC. These amounts will be deducted from the intermediary’s fee for the work provided.

Please see the HMRC guidance for further details:

Update: November 2018

In the 2018 budget, it was announced that the IR35 reporting changes will be extended to private sector employers with effect from April 2020.



  • Human Capital Management (HCM)
  • SAP R/3
  • SAP ERP Core Component
  • SAP enhancement package for SAP ERP
  • SAP enhancement package for SAP ERP, version for SAP HANA
  • SuccessFactors Employee Central (EC)
  • SuccessFactors Employee Central Payroll (ECP)


SAP ERP Central Component all versions ; SAP ERP all versions ; SAP R/3 Enterprise all versions ; SAP R/3 all versions ; SAP enhancement package for SAP ERP all versions ; SAP enhancement package for SAP ERP, version for SAP HANA all versions


EC Payroll, Payroll Integration, Off payroll PS , KBA , PY-GB , United Kingdom , How To

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