PSC Contractor London
Are you a PSC Contractor in London?
Whether you are a PSC contractor London or anywhere in the UK you probably provide your specialist services via an intermediary, such as your own Limited company or an umbrella company; collectively known as a personal service company or PSC.
HMRC often substitute the term “PSC” for “intermediary” in their consultation documents. The IR35 rules and legislation is also referred to as “the Intermediaries legislation” and doesn’t just apply to companies. Provisions extend to partnerships and individuals which stand between the end-users (hiring company) and the individual whose services are supplied (contractor). The use of PSCs to avoid tax is one of the prime targets of the IR35 legislation, which seeks to ensure that employment taxes are paid on employment-type relationships.
Surprisingly, the term PSC, isn’t legally defined, which means hiring companies and PSC contractors are getting nervous about the vague employment legislation with regard to engaging specialist consultants or contractors. The government is indicating that they will require hiring companies to provide specific reasons for each IR35 status determination and, if necessary, introduce a hirer-led status challenge process. Through this, a PSC contractor would be able to put forward evidence to appeal a decision which is good news as it provides PSC contractor London a route to challenge decisions and should also ensure that hiring companies take their responsibilities seriously and exercise ‘reasonable care’ in their status decisions. They will have to have good reasons for each outcome and PSC contractors now have some comfort that, if a decision seems unfair, there is a ‘right to reply’ and a process to review evidence.
PSC Contractor London
PSC contractors caught by IR35will no longer be able to claim tax relief for pension contributions or deduct a 5 per cent allowance for expenses, further reducing PSC contractors take-home pay, and could mean that being a PSC contractor is no longer financially preferable to PAYEemployment. Unfortunately for PSC contractor London or the UK, there is nothing in the consultation about the incoming burden for contractors of having to assess whether the end-user is exempt from the off-payroll rules each and every time a contractor begins with a new client.
If you are currently among the thousands of PSC contactors working in London, you should start having serious conversations with your recruiter and hiring company now. If you are concerned that you fall within the scope of IR35, this doesn’t have to mean the end of your contracting. If you are understandably concerned about your PSC contractor status and how IR35 will affect you or your hiring company in London please contact SMCC today by calling 01277 211151 or by email.
We will be happy to discuss your concerns and apply our experience and expertise to offer a bespoke solution.
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