HMRC is clamping down on the engagement of self-employed workers. It is currently focusing on workers engaged through personal service companies and has just released two key documents
1. IR35 Business Entity Tests – Guidance
This is targeting personal service companies that are not paying enough PAYE.
2. The Taxation of Controlling Persons – Consultative Document
This is targeting the engagement of senior/controlling persons via personal service companies. HMRC is looking to treat the person as an employee of the engaging organisation rather than the personal service companies. The engaging organisation would then need to place the person on their payroll and account for tax and NI under PAYE.
The proposals in the consultative document will affect you, and could significantly increase your costs, if you engage workers in senior positions via personal service companies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
