- Determining each contractor’s tax status (i.e. does IR35 apply to them?)
- Delivering this verdict to the contractor
- Ensuring that all relevant taxes and NICs are paid by the PSC and contractor
In April 2021, off-payroll working rules will be extended to the private sector. This may give your business some new responsibilities to consider.
Businesses engaging contractors via PSCs will become responsible for:
- Determining each contractor’s tax status (i.e. does IR35 apply to them?)
- Delivering this verdict to the contractor
- Ensuring that all relevant taxes and NICs are paid by the PSC and contractor
This applies to all engagers of PSC contractors, although HMRC have confirmed that small businesses (with a turnover under £10.2 million, a balance sheet total under £5.1 million, and fewer than 50 employees) will be exempt from the changes.
Businesses engaging contractors via PSCs will become responsible for:
- First, make a list of your ‘off-payroll’ workers. How many PSCs (Personal Service Companies) are there? Related categories include sole traders and the self-employed.
- Compile year-end dates. Segment your list by year-end date.
- Complete the vitality rating to establish how vital each contractor is to your business.
HRS offer an auditing solution (both onsite and remote) to ensure your business is aware of the predicted status of each of your current PSC contractors. We can also provide easy-to-use templates to help you complete the steps listed above.
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