New rules apply to agencies supplying workers and work as a ‘kind of’ IR35 for the self-employed. HMRC have dubbed these new regulations the “false” self-employment rules.
Contractors working through their own limited companies are NOT self-employed and therefore should not be caught.
Some agencies have sent questionnaires to contractors (and their Limited companies) with some standard questions, for example:
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You only employ your workers on a contract of employment and pay them through the PAYE scheme (which allows for expenses to be paid gross in certain circumstances)?
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You are a personal service company?
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If you are a personal service company:
- the worker deployed or to be deployed by you controls the company and/or is the sole director of the company
- you do not make or plan to make any payments gross except allowed expenses or dividends
- your payroll is also operated in the UK
- If your answer to both 1 and 2 is No please advise the nature of the engagement between you and the service provider
- Self-employed
- Director’s agreement
- Other
- If your answer to 4 is Yes to “Other” please provide details
If you are a director of your own Limited company you should be answer these questions:
- Possibly yes but probably no; most directors do not have a contract of employment.
- Yes
-
- Yes probably although be careful if you co-own the company with your spouse
- Yes even if you pay yourself £663 per month such that no tax or national insurance is due in 2014-15 this answer is still yes.
- Probably yes if you do it yourself or your accountant runs your payroll as part of your package
- N/A
- N/A
If you are self-employed and you work through an agency you may be caught.
A further blog will be posted for the self-employed.
If you need help on determining whether you will be caught by these rules then contact Clearways Accountants on 01737 244298 or complete the contact form below.
Image courtesy of Stuart Miles / FreeDigitalPhotos.net