From April 2017, Contractors (Locums) working on Public sector contracts are no longer responsible for determining their own IR35 status. Due to current changes in Law, The Public sector engager/end client (employer) will be required to determine the IR35 status. If the contract is assessed to be inside IR35, the entity which pays the contractor’s limited company (most likely to be either the public sector body (NHS Hospitals) or a recruitment agency) will become responsible for deducting the resulting tax from payments made to the limited company and reporting these deductions through their own RTI processes.
The legislation also confirms that the “deemed salary” calculation to be applied will no longer give a 5% allowance for company running costs for Public sector workers.
So, if you are a Locum working on an assignment for a public sector client, from April 2017 you may see PAYE tax being withheld from the payments made to your company if your end client believes that you are caught by IR35. This doesn’t mean that you are no longer able to contract through a limited company but your take home pay may be affected if your public sector client or agency believes you are working on an assignment caught by IR35.
Your Next Step?
- Switch to Medic Umbrella Now!
- When switching to Medic Umbrella move your limited company to us while we register you to start our Umbrella Solutions in April, We will even close down your Limited Company for Free!
- Medic Umbrella will make sure that you are compliant and that you will receive a better “take home pay”. This will also give you full employment rights and statutory payments.
- Transparent and fully Compliant payroll
- Easy and simple set up Register Now
- Comprehensive insurance package
- Experienced and friendly staff to manage your account and quick to respond
- All PAYE and NI deducted at source and in full
- Full statutory employment rights
- Daily payroll runs
- Guaranteed Friday payments