A genuine outsourced service

With more focus on the SOW model there is a real need to ensure the arrangement is genuinely contracted-out rather than simply the provision of labour.

End clients must have processes in place to ensure that not only the contractual arrangements, but the working practices, reflect a truly outsourced service. Simply put, the responsibility for assessing the tax status of workers has moved up the supply chain. The end client is now responsible for determining status, rather than the contractor, regardless of whether an agency or other intermediary is involved.

There is, however, an exemption to off-payroll if the services provided by the supplier are delivered under a genuine SOW on a fully contracted out (outsourced) basis. There is a further exemption if the end client is small with turnover less than £10.2 million, less than 50 employees and/or less than £5.1 in gross assets.