IR35 & Umbrella Companies

IR35 – Important information for contractors

From 6 April 2017, new rules Off-Payroll Working in the Public Sector moved the responsibility for assessing IR35 employed and self-employed for tax status from the Personal Service company (PSC) to the Public Sector body receiving the services.

If deemed inside IR35 then the party paying the PSC, either the Public-Sector Body or the Agency, or other third party, have to deduct income tax and National Insurance from the “Deemed” employment income.

From 6 April 2021 the same rules will apply to Limited Contractors working in the Private Sector with the responsibility for assessing IR35 employed and self-employed for tax status shifting from the Personal Service company (PSC) to the Private Sector business receiving the services.

If deemed inside IR35 then the party paying the PSC, either the Private Sector business or the Agency, or other third party, have to deduct income tax and National Insurance from the “Deemed” employment income.

More detailed information can be found on the HMRC website via the links below:

• HMRC publications off-payroll working in the public sector
• HMRC publications off-payroll working in the private sector

Our consultant will let you know if the job is inside or outside of IR35