If you’re a recruiter dealing with Public sector contracts, the chances are you’ve recently seen some changes in how your contractors want or need to be paid. Those who have been deemed to be inside IR35 will usually be better off with umbrella employment, so you could find that you’re dealing with more umbrella companies than ever before.
The Department of Education has released their annual School Workforce Report for 2016, which provides detailed analysis of the size, demographics and deployment of teachers in England.
The report shows that 2.16 million teaching days were lost due to teacher sickness in the last academic year, while more than half of all teachers had at least one period of sickness.
According to Contractor Calculator, HMRC claim that their Employment Status Service Tool – the online tool they have designed for hirers and contractors to determine IR35 status – has been used more than 186,000 times and was able to provide an answer in 80-90% of cases.
However, in response to a freedom of information request submitted by Contractor Calculator, HMRC indicated that usage had increased to 350,000 but the tool does not record the results.
If you’re working inside IR35 in the Public sector, your agency or end client will correctly report your income to HMRC as employment income and deduct income tax and national insurance before paying your limited company. However, you may find that they also deduct Student Loan repayments. This is not correct.
Why is this happening?
At Orange Genie we talk a lot about compliance. We advise contractors and recruiters alike to work with accredited FCSA members, so they can be certain their partners are trustworthy. This is an example of why we believe that message is so important.
Geoffrey, Joshua and Andrew Copp, who ran Central Payroll Services (later rebranded as Quality Premier Services) have been jailed for stealing £45 million while running umbrella payroll. They were convicted of conspiracy to defraud the public revenue and money laundering between February 2012 and December 2015.
