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IR35 & Public Sector Workers – Changes from 6th April 2017

Long mooted changes to those working in the Public Sector via a Personal Service Company (PSC) have recently been clarified and will be ratified in the Finance Act 2017.

Contractors themselves will not be able to decide if the Intermediaries legislation applies to them. This responsibility will fall on the public sector body, which is engaging their services.  It had always been thought that the party paying the worker (most commonly the agency) would be responsible for determining the workers status.  The responsibility for the tax will move from the worker themselves to the staffing agency or third-party that pays them.

HM Revenue and Customs (HMRC) have developed a utility to assist public sector bodies, the Employment Status Indicator Tool, which will be made widely available in late February.

Appeals

HMRC have said very little on the matter of an appeals process.  All we know is that if the contractor thinks that they have been taxed incorrectly, they can submit a repayment claim to HMRC. The end-user must respond to requests about its decision within 31 days.   If they take longer to reply, either to the agency or to the PSC – which can ask how they came to their decision – the end-user becomes responsible for accounting for PAYE.

How can MyAccountant help?

We offer a wide range of solutions for those working in the public and private sector.  We can assist with IR35 and non-IR35 contractors.  Our umbrella vehicle from our sister company Smartwork can work out better for those who work solely in the public sector as opposed to continuing to operate via their PSC.  We review each of client’s affairs on an individual basis to establish the best way to trade as take-home is not always the sole deciding factor.

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