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22nd March 2017

Are you ready for April and the new tax rules for PSC contractors?

It’s all systems go for the changes to tax rules for limited co/personal service company (PSC) contractors working in the public sector. Are you prepared?

From April 2017 payments to most contractors working in the public sector through their own PSC and deemed to be caught by IR35, will need to be treated as employment income and also subject to the deduction of Employers National Insurance. These payments will also have to be taken into account when calculating the new Apprenticeship Levy for those agencies with a payroll value of more than £3m/year.

The ‘fee payer’ (the person or company making payment to the limited company) will be responsible for ensuring that the correct deductions are made and for submitting RTI to HMRC. If the agency pays its PSC contractors directly, it will be the ‘fee payer’ and have legal responsibility to ensure that all payments are calculated in accordance with the new rules. It will also be responsible for payment of the corresponding Apprenticeship Levy.

An easy way to be primed and ready

Payme Prime takes the burden of risk, compliance and administration away from agencies that supply limited company contractors to both the public and private sectors. And contractors get the benefit of being limited with none of the hassle.

Here’s a brief guide to what Payme Prime will do for you, whether you’re an agency or a contractor. For more details, please contact Simon or Andrew on 0333 200 0845 or email simon.ruston@payme.co.uk

For agencies, we will:

  • Calculate and deduct all statutory payments of NI, tax and Apprenticeship Levy, saving you time and money
  • Submit the relevant RTI to HMRC
  • Make statutory PAYE payment to HMRC
  • Send you a consolidated quarterly report to submit to HMRC (intermediaries report).

For contractors, we will:

  • Invoice your agency on your behalf
  • Make same day payment to your bank account
  • Submit your annual accounts to Companies House
  • Provide week-to-week accountancy advice including the very latest legislation and rules that might affect your business.

HMRC launches Employment Status Service

Just in time for April, HMRC has launched its Employment Status Service (ESS) to help contractors and agencies determine the contractor’s IR35 status.

Click here to try it out for yourself.

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