Concept: IR35 Workers (UK)
The UK introduced IR35, or off-payroll working, for medium and large organizations from
2021-04-06. For the purposes of payroll, if a contingent worker, once assessed, comes
under IR35 regulations, employers must report them to HMRC using payroll and subject
them to:
- Income tax.
- National Insurance.
- Apprenticeship Levy (where applicable).
Assessed workers who come under IR35 regulations are known as deemed workers and don’t qualify
for benefits, compensation, or statutory payments.
Considerations
A contingent worker might have more than 1 contract, therefore you might have
different outcomes when you assess each contract. Ensure you take the appropriate
action for each contract. If there are changes to a contract, you must assess each
time and update your records.
If your assessment shows that an individual is a deemed worker, you must inform them as soon
as is practically possible. A deemed worker can dispute the outcome; HMRC provides
guidance on the steps you should undertake in this case.
Recording in Workday
If you have Payroll for the UK but don’t pay deemed workers through it, or you only use
Workday HCM, you can still record contingent workers' assessments.
When you assess your contingent workers, use the
Maintain UK Worker IR35
Details
task to record the outcome.