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How you will be affected by the new IR35 legislation?

Posted on 22 February 2017

As of April 2017, The Government has confirmed that new rules are being introduced surrounding the current intermediaries legislation (also known as IR35).
 
IR35 is the set of rules that determine how much tax and NI should be paid, and it is applied to all off-payroll candidates working in the public sector.

If you are registered for work as a Personal Service Company (“PSC”), it is highly likely that the changes to the IR35 legislation will affect how you are paid. 

Brief overview – how will the changes to IR35 affect you?:
 
Currently you decide if the IR35 rules apply – the changes to the legislation in April 2017 moves the responsibility to the public sector client to decide whether your assignment will be inside or outside IR35. (Simply put, IR35 applies to all cases where if it wasn't for the existence of the PSC, you would be considered an employee of the client) 
 
This includes the following:
  • You work through your own PSC
  • You work through an umbrella company
  • You are self employed and paid gross
It is likely that ALL temporary doctors provided through a PSC to NHS hospitals will be considered “inside IR35” and some of the national supplier frameworks have already confirmed this to be the case .

Where the rules of IR35 apply, the fee-payer (the public authority, recruitment agency, or other third party paying the intermediary) will calculate Income Tax and primary National Insurance contributions (NICs) and deduct these at source.

All payments made after 5th April 2017, regardless of when the work was booked or completed, will come under the new legislation.
 
If you would like to discuss this information in more detail, please click here for full guidance, contact our Finance Director, Nina Learoyd here, or speak to your recruitment consultant on 0208 099 6943. You should also speak to your accountant if you have one for some further advice.

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