AGENCY WORKERS AND PAYE


Changes in the Finance Act 2014 have tightened up the rules for “self-employed” workers supplying their services through UK agencies, employment businesses and other intermediaries.

From 6 April 2014 the agency must decide whether the way in which the worker does their work is subject to (or to a right of) supervision, direction or control by the end client or someone else. If it is then the worker will fall to be treated for income tax and national insurance contributions as an employee and the worker’s pay will be subject to PAYE and Class 1 employees/employers national insurance contributions.
HMRC have confirmed that the agency legislation will not generally apply where a worker is engaged via a personal service company (PSC). This is because the agency legislation will only apply when remuneration is received by the worker as a consequence of providing the services.
Dividends paid to the worker as a genuine consequence of their shareholding in the PSC will not normally constitute “remuneration” for the purposes of the agency legislation. Such workers will still potentially be subject to the “IR35” rules.

Advertisements

Leave a comment

Filed under Accountancy & Tax Stuff

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s