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.
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
Police and fire authorities
Educational establishments including universities
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.
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 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.
Unfortunately, if you are deemed to be within IR35, you will no longer be entitled the 5% allowance.
These changes will apply to all payments made after 5th April 2017, even if the work was completed before.
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 …
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
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 …