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Agencies face liability for employers NIC
Agencies who supply limited co contractors (PSCs) to the public sector could have to pay employers NIC from April 2017 when new IR35 rules come into force.
This would clearly have a huge impact on profit margins at a time when things are already very tight.
The consultation on government proposals for changes to IR35 has now closed and we await final confirmation of exactly what the new legislation will look like. But given our previous experience of the speed at which our industry is expected to implement rule changes, it’s as well to be prepared for worst.
Meanwhile we also await the development of HMRC’s new online test. The purpose of this test is, we are told, to provide a definitive answer to whether a contractor falls under IR35, thereby making it easy for an agency or end-user to determine whether they need to pay tax and NI contributions for that worker.