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What should payroll companies be doing for IR35

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Hi everyone!

This is my first post to this forum so i'm hoping someone can help! 

I work for an accountants (im part qualified) and we have alot of contractors as clients. They all have a limited company and we pay them and deduct their taxes weekly when we get the money from the recruitment agency. 

I would like to know if we are preparing as well as we can for the IR35 changes happening in April. As far as I am aware, it is the recruitment agencies who should be detrmining the contractors IR35 status. Is this correct? What should we be doing to make sure we are complient as accountants.

Thanks

Anna

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By ms998
15th Jan 2020 15:50

It is the end client who will make the determination of whether they are in or out of IR35. If inside IR35, the end client will operate PAYE on any payments made to the PSC.

Contractors won't need to operate PAYE unless they are paying themselves a separate salary.

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By Kate Upcraft
24th Jan 2020 11:53

Hello
I think you're asking as a practice that is running the payroll for the PSC (the contractor) rather than providing payroll services for clients who use contractors? If it is the former, when the director wishes to extract salary from their PSC (Potentially once a year if you're running an annual PAYE scheme) the amount withdrawn is now reported non-taxable non n'iable and the amount is reported in data code 58A within the full payment submission.. However, given that the director's NI record is now protected by the deemed payment that's been made by the client/agency you may choose no longer to withdraw monies on the basis of a salary and withdraw them all as a dividend, which will equally be tax-free up to the net amount that is already had a with holding by the end client. or their agency if they are the fee payer. for seats of how to prepare there SA return see the new ESM page at https://www.gov.uk/hmrc-internal-manuals/employment-status-manual/esm9085

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