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HMRC internal manual

Employment Status Manual

DRAFT off-payroll working legislation: Chapter 10, ITEPA 2003 (from 6 April 2020): basic principles: other organisations and public authorities newly within scope - when the off-payroll working legislation applies and commencement

This is a draft and may be subject to change


Note – Any reference to public authority on this page only refers to public authorities that were not included in the definition of public authorities in section 61L(1), Chapter 10, Part 2, ITEPA 2003 prior to 6 April 2020, i.e. this page is only relevant for public authorities who are brought into scope of the off-payroll working rules from 6 April 2020. See ESM10005 for details.

The guidance in this page applies to organisations other than those defined as public authorities by section 61L of ITEPA 2003 (as that section had effect before 6 April 2020). That is medium and large-sized non-public sector clients and public authorities that are within scope from 6 April 2020 but were not within scope prior to 6 April 2020.

The legislation applies where all of the following apply:

  • An individual (‘the worker’) personally performs, or is under an obligation to personally perform, services for another person (‘the client’), who is a public authority (listed in g) or h) in ESM10005) or a medium or large-sized organisation (see [ESM10006 - ESM10009]), under arrangements involving an intermediary in circumstances such that if the contract had been made directly between the client and the worker then the worker would be;
    • Regarded as an employee of the client or the holder of an office under the client; or the worker is an office-holder who holds that office under the client and the services relate to that office.  
  • the services are provided not under a contract directly with the client but through a third party (known as an intermediary)
  • payment for the services is made on or after 6 April 2020
  • services are provided by the worker to the end client on or after 6 April 2020
  • one of the conditions of liability is satisfied according to the type of intermediary (see ESM10003).
Statutory auditors

Holding office as a statutory auditor of the client does not count as holding office under the client for these purposes. Here “statutory auditor” means a statutory auditor within the meaning of Part 42 of the Companies Act 2006. Further guidance on the meaning of office holder can be found at ESM2500 onwards.


For organisations other than those defined as public authorities by section 61L(1) (as that section had effect before 6 April 2020, see ESM10005), the rules come into effect from 6 April 2020 in the way explained below.

The new rules will apply to payments made on or after 6 April 2020 only where the services were also provided on or after 6 April 2020. So if a payment is made on 30 April 2020 and the services were provided from 6 April 2020 onwards, the whole payment would be within the rules.

If the services were all provided prior to 6 April 2020, but the payment was made on or after 6 April 2020, the payment would not be subject to the new rules. The rules set out in Chapter 8, Part 2, ITEPA 2003 would still apply for payments made in these circumstances.

If a payment is made for services which were provided both before and after 6 April 2020, then a just and reasonable apportionment should be made. So the new rules would apply to the part of the payment which can be reasonably seen to be for the worker’s services provided on or after 6 April 2020. Chapter 8, Part 2, ITEPA 2003 would apply to the part of the payment relating to services provided before 6 April 2020.


Alexi provides his services to a medium sized client from the 23rd March 2020 to 17th April 2020. Alexi works 8 hours a day, Monday to Friday and operates through a PSC. Alexi would be employed if engaged directly. There are 10 working days before 6th April 2020 and 10 workings days on or after 6th April 2020. The payment for these services is £2,000. So £1,000 of this (10/20 days) is subject to Chapter 8 and then the other £1,000 (10/20) subject to the new rules.

Compliance checks into Intermediaries under Chapter 8 ITEPA for years before 6 April 2020

HMRC have taken the decision that they will only use information resulting from the new off-payroll working rules to open new compliance checks into returns for earlier years under Chapter 8 ITEPA if there is reason to suspect fraud or criminal behaviour.