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Training your staff (part 2)

Updated 15 December 2023

Read Purpose, scope and background (part 1) of these guidelines, if you have not already.

You should read these guidelines alongside existing off-payroll working guidance. They are not designed to be used in isolation, or to create an end-to-end process for organisations to comply with the rules.

Your organisation should apply the guidelines to reflect the complexity and scale of your own off-payroll working engagements. Use these guidelines to help make informed decisions, based on individual circumstances.

Training your staff

If your organisation is within the scope of off-payroll working, you need to have robust training in place for employees who will need to understand and operate the rules.

This training will need to cover:

• the off-payroll working rules
• what is required of different parties in a contractual chain
• how to understand employment status principles, to make an accurate determination

What your training should include

All organisations, including clients, deemed employers, and agencies in the labour supply chain, will need to consider the content of the training they will provide.

Your organisation will need to consider either: 

• using a generic, ‘off the shelf’ training package
• working with an external advisor to develop and deliver a custom-made package for your organisation

If you use a generic training package, it’s good practice to add content that will make the training relevant to your organisation.

If your organisation is significantly impacted by the off-payroll working rules, you’re more likely to need a custom-made training package.

Training packages should cover the nature of the roles in your business and the specific contracts you use. For example, expanding on employment status principles that have the most impact where specific contracts are used for certain groups of workers, such as IT contractors.

Your training will need to cover all the systems and processes needed to make an informed status determination for off-payroll workers. We would expect the following to be included.

For clients

Training should include:

• pre-engagement considerations, such as the scope of the adverts, engagement terms and conditions and discussions with fee payers
• onboarding considerations, such as ensuring all engagements within scope of the rules are considered, and what interaction is needed with any other parties involved in the labour supply chain, such as agencies
• understanding whether any managed services are fully contracted out for the purposes of the off-payroll working rules
• how to recognise and understand the employment status principles (or indicators) in order to make informed determinations
• the use of employment status determination tools, such as the Check Employment Status for Tax (CEST) tool
• understanding who in the client organisation is responsible for signing off status determinations
• how to avoid blanket determinations (where a client makes the same status determination across a group of workers, without considering the contractual terms and actual working arrangements) — HMRC do not accept blanket determinations

• how to approach role-based determinations, and:

  • where these can be used
  • how they differ from blanket determinations
• how to produce a valid status determination statement
• passing a status determination statement down the labour supply chain
• calculating the deemed payment
• considerations of outsourcing responsibilities to a third party
• how to follow the disagreement process if the worker or the deemed employer disagrees with a status determination
• internal auditing processes

For deemed employers who are not the client

Training should include:

• pre-engagement considerations, such as the scope of the adverts and discussions with clients and other agencies in the labour supply chain
• onboarding considerations, including what interaction is needed with any other parties involved in the labour supply chain, such as clients and agencies, to ensure all engagements within scope of the rules are considered
• calculating the deemed payment
• how to follow the disagreement process if you disagree with a status determination
• internal auditing processes

For agencies who are not the deemed employer

Training should include:

• pre-engagement considerations, such as the scope of the adverts and discussions with clients and other agencies in the labour supply chain
• onboarding considerations, including what interaction is needed with any other parties involved in the labour supply chain, such as clients and agencies, to ensure all engagements within scope of the rules are considered
• passing a status determination statement down the labour supply chain
• internal auditing processes

Sharing best practice

These are not exhaustive lists. Your organisation may have additional training requirements, either:

• due to the complexity in their business or industry sector
• related to their specific off-payroll working engagements

As well as training, staff involved in operating the off-payroll working rules for your organisation should be able to easily access both:

• your own internal guidance
• HMRC’s guidance

Your organisation should share these guidelines with those responsible for implementing your off-payroll working systems and processes.

Your internal guidance

Where you engage workers in specific roles on standard contracts, you could consider adding internal guidance, setting out the employment status indicators for the terms and conditions in the contracts.

For example, you may engage several workers in similar roles on a standard contract, which states that substitution either:

• is not allowed
• needs to be approved by your organisation to some degree

In this case, your guidance could indicate the appropriate answers to give when using HMRC’s CEST tool (or another tool that helps determine employment status for tax).

You should review your internal guidance regularly, in line with any changes to your standard contracts, to make sure it’s still relevant and accurate.

Evaluating your organisation’s training

To make sure your organisation’s training provision is sufficient, you could:

• include knowledge checks with multiple choice questions at the end of each topic to test understanding
• ask for participant feedback, to make sure they have fully understood the material

Your organisation should periodically review the training content to make sure it’s up to date and relevant. You should also make sure your staff take regular refresher training. You should record training requirements and timelines, including dates for refresher courses, and make them available to staff.

Make sure to keep up to date with HMRC’s latest guidance. Your organisation can do this by:

• reading and signing up to email alerts for the HMRC employer bulletin, which we publish 6 times a year
• signing up for GOV.UK page updates — you will receive an email any time the page you are interested in is updated

Find the main guidance pages for the off-payroll working rules in legislation and guidance.

If you are a tax agent or advisor, you can also sign up for agent updates.

Who you should provide training to

You should provide training to everyone involved in both:

• making employment status decisions
• gathering information to support those decisions

The exact personnel will vary between organisations. It will typically include the hiring manager and their deputies, as well as other staff involved in the decision-making process.

Procurement personnel should be able to:

• identify any managed services they source that may involve off-payroll workers
• understand how their organisation will account for these workers in their off-payroll processes

Any staff operating PAYE in your organisation will need training to make sure contractors are correctly payrolled.

Consider which other individuals or roles within the business need this training. For example, staff considering disagreements will need to understand the disagreements process.

Make sure to provide training on off-payroll working rules at an early stage. For example, you could build the training into the learning plan for any newly-hired decision makers.

Example of training staff

This is an example of where an organisation has effectively implemented a process for training their staff to understand their obligations under the off-payroll working rules.

A local council engages a large number of workers through their own intermediaries. The council understands that they need to consider the off-payroll working rules. They ask their tax advisers to arrange suitable training for staff responsible for deciding whether the rules apply. They deliver this training to all hiring managers and it is built into the induction learning plan for any new hiring managers.

The council carries out evaluation of the training, including asking for feedback from the training sessions. They also carry out learning checks. They establish that their staff still are having difficulty understanding some aspects of the off-payroll working rules.

The council reviews their status decisions, and identifies several potential errors. These are a result of their staff not fully understanding status indicators. This has led to the council receiving a significant number of disagreements from workers.

The council identifies that the current training needs improvement, and decides to deliver it in-house to ensure it meets its needs. The council design an in-house training package with focus on understanding the various employment status indicators. The training includes guidance, and links to the HMRC Employment Status Manual guidance to use when answering questions on the CEST tool. This ensures consistency across all hiring managers.

The council’s legal team consider the contracts they have with their off-payroll workers. They identify that none of their IT contractors have any element of financial risk, as the council provides all their required equipment. The IT contractors do not have any material expenses which are not reimbursed and cannot realistically make a loss from the work. 

Their internal guidance explains the appropriate answers to use when answering related questions on the CEST tool for these contracts.

The council introduces a process to monitor the outcome of off-payroll working status decisions. Where a hiring manager’s decision varies from what is expected for a particular role in that area of the business, the council holds further discussions to ensure the correct procedures and guidance have been followed. Where the council identifies consistent errors, it arranges to provide further training.

The council sets up an off-payroll working page on their intranet, which includes:

• links to internal and external guidance
• offline copies of the presentations used in training
• an FAQ section which provides helpful pointers for hiring managers

The council carries out a further evaluation after the delivery of the in-house training package. The evaluation indicates that the improvements have been successful. Hiring managers’ understanding and confidence has increased. Consistency across decision making has been improved, and the number of disagreements received from workers has been reduced.

Ensuring the right training is in place will not necessarily mean that your organisation is compliant with the off-payroll working rules. Robust training is the foundation to successfully implement the principles set out in the rest of these guidelines.

The next section of the guidelines is Record keeping (part 3).