“Off payroll working” legislation will be introduced in the private sector from April 2021, from which point agencies will need to ensure that they do not pay PSCs gross if the assignment is caught by IR35. Contractors on assignment with “small” private sector end hirers are out of scope. After the introduction of the off-payroll rules the responsibility for determination of whether IR35 applied moves to the end hirer, with the agency (as the fee payer) becoming responsible for deducting employment taxes if IR35 applied.


  • New legislation comes into force April 2021, its important to prepare for this now.

  • Financial liability for off-payroll will pass up the recruitment supply chain to end hirers. Agencies may find that clients are asking questions now about their potential exposure.

  • Undertake a review of contractor roles to identify those at risk. Compass can help agencies and end hirers carry this out.

  • Plan the transition of contractors to a solution such as Compass EOR.

  • Be aware that contractors will have a right to know how a status decision has been made, so it may be appropriate to engage with them before April 2021 to avoid last minute issues.

The team at Compass have extensive experience with employment status and are ready to help you plan for the changes.

Get in touch on 03333 66 00 28