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Posted 24th February 2017

Do you or your workers work in the public sector?

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If so you need to be aware of the IR35 changes for contractors operating in the public sector.

From April 2017 the responsibility for determining IR35 status will fall with the hirer/agency instead of with the contractor for work carried out within the public sector.

If you only work in the private sector then the changes won’t affect you.

The change could have an impact on workers who take on contract work for public sector clients such as police forces, schools, local councils or the NHS as well as organisations like the BBC and universities. This is the latest in a raft of legislation changes to be brought in by HMRC to target what is often described as false employment.

What do the changes mean? 

From this April the agency (or whoever is paying the contractor so in some cases the client where the contract is direct) will have to decide if a contract is inside IR35 or not. If it is deemed to be inside IR35 then the contractor will be taxed at the source before they are paid. This will happen even if the contractor is operating as a PSC and has previously been responsible for his own tax affairs.

The change is causing concern for agencies and contractors alike. Contractors are worried that their take home pay will suffer and recruiters are concerned this latest change will mean yet more administration and liability for them.

We can help

At Exchequer Solutions we can help with any contractors who decide that, in light of the changes, they would prefer to work on an umbrella or PAYE scheme. For contractors who are confident their work remains outside IR35 then our sister company Exchequer Accountancy Services will be able to help.

If you have any questions about the changes then get in touch. We have been following the changes closely and will be happy to discuss individual circumstances and the impact the changes might have.

 

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