Withdrawal of Funds received by PSC from engage

Informing HMRC of withdrawal of funds received by PSC from engage after PAYE/NI under IR 35

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Appreciate if someone can help me to sort out below issue.

My client is a director   is a limited company ( PSC). My client provides services to a larger group ( engage) and raise invoices for the services rendered .  Engage recover PAYE/NI  from the invoice amount and remit the difference to PSC. My client withdraw these money (net received)  as directors remuneration  and no PAYE or NI deducted  made since its already recovered by the engage. I assume these are exempted from PAYE/NI. Could you please let us know how to report  this to HMRC? If we send an RTI  without  indicating  no tax is deducted this will duplicated under employees name in his P800  and HMRC can come back saying no correct tax is paid. Could you please  let me know how to deal with this situation and report to HMRC .

Replies (3)

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By Paul Crowley
09th Apr 2024 11:35

If the client knew that he was under IR35 then being paid just wages by an intermediary is by far the best (or easiest) solution to this problem.

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By Sandnickel
09th Apr 2024 12:48

You do report it under RTI. There is a tick box to say that the wages are "off payroll" working.

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Replying to Sandnickel:
By FactChecker
09th Apr 2024 15:36

Indeed ... IF the situation is that the worker has been assessed as a 'deemed employee' by the Employer (and so tax/nics have been deducted under PAYE from what was paid to the worker's company - on the assumption that, by definition, the contract for the work was with worker's company, not the individual).

What the box to be ticked is called will of course be dependent on the particular Payroll software used ... but it should result in Yes being shown in the FPS for the data item 'Off-Payroll Worker subject to the rules'.

FWIW the associated technical guidance says:
* If “Yes” then do not make or report any student loan or postgraduate loan deductions, the worker will not be entitled to statutory payments (SAP, SSP, SMP, SPP, ShPP or SPBP) and is not subject to auto-enrolment into a workplace pension.

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