Off-Payroll Working in the Public Sector

The rules for working in the public sector are changing. From 6th April, IR35 status in the public sector will no longer be determined by the assignment holder, but the decision will instead be made by the end-client.

Here we answer your frequently asked questions around these ‘off-payroll’ changes.

  • How do I know if the reforms affect me?

    Whether an assignment is classed as within the public sector is determined by the Freedom of Information Act 2000.

    We have listed some examples of public authorities below, but further information can be found here.

    Some examples of public sector bodies are:

    Government departments, executive agencies and non-departmental public bodies
    NHS
    Police and fire authorities
    Local authorities
    Devolved administrations
    Educational establishments including universities
    BBC
    Channel 4
    Bank of England

     

    It is worth noting that if you work for a charity who do work for the public sector, the changes will not affect you.

    Similarly, …

  • Who will assess the IR35 status of my assignment?

    The IR35 status of your assignment will be decided by the public authority. HMRC are releasing a tool to assist them in making this decision, although use of this tool is optional.

  • If I am assessed as within IR35, how will it affect me?

    If you are assessed as within IR35, the key change will be that Tax and NI will be calculated and deducted by whoever pays your invoice, and you will receive a net salary into your Limited Company.  Additionally, you will no longer be able to claim Travel and Subsistence expenses.

  • Will I still be entitled the 5% tax allowance for business costs?

    Unfortunately, if you are deemed to be within IR35, you will no longer be entitled the 5% allowance.

  • What if my assignment started before April 6th?

    These changes will apply to all payments made after 5th April 2017, even if the work was completed before.

  • Should I continue working through a Limited Company?

    If you’re deemed to be within IR35, the best route for you will depend on your personal circumstances.

    You can continue to work through your limited company but the things to consider are:

    your agency or end-client must allow payment via a Limited Company
    you won’t be entitled to the 5% allowance to cover the cost of running your Limited Company
    all your contract income will be subject to Tax & NI and you’ll receive a net salary into your Limited Company

    Depending on the length of your public sector assignment, you may want …

  • What are the benefits of switching to an Employment Business (Umbrella)?

    For a weekly or monthly margin an Employment Business will take care of your administration and make sure that you’re paid promptly, whilst also providing you with all the benefits that come with employment, such as:

    Statutory Sick Pay
    Maternity or Paternity Pay
    Pension Contributions
    Holiday Pay

     

    Our solutions also include:

    Access to our BUPA Medical Cash Plan for you and up to 4 of your children*
    Personal Accident Insurance
    Professional Indemnity £5,000,000
    Public/Product Liability £5,000,000
    Discounted Self-Assessment Tax Return for any other income streams

    Access to a free financial review with …