Managed Service Companies - Information regarding changes

info@piper-recruitment.com — Wed, 08 Aug 2007 11:53:32 +0100

Have all your questions been answered? If not read on ......

If you have been told by your MSC that you can simply move across into a PSC, thereby side stepping new legislation and carry on as normal - you may have received some incorrect information.

We recommend that you speak with HM Revenue & Customs to gain a full and true understanding of these changes..

IR35 - Are you up to speed?

info@piper-recruitment.com — Tue, 07 Aug 2007 20:21:43 +0100

With government legislation changing, are you up to speed with current requirments made by HM Revenue & Customs? Find out more...............

This information has been taken directly from the HMRC website. For more information, please visit www.hmrc.gov.uk

Intermediaries Legislation (IR35) - Working through an intermediary, such as a service company

Worker(s)

Where you are the director and owner of a personal service company, you will in effect be the person who must decide whether a particular engagement falls within the IR35 legislation. It has come to our notice that some workers working within the legislation are not aware that they are actually being engaged under such terms, particularly at the onset of their engagement. If you are the person providing the services then you are responsible for the terms you have agreed to, so it might be advisable to clarify the actual terms and conditions of the proposed relevant engagement.

You can submit a contract to HMRC for an opinion.

Intermediary

Where an engagement falls within the legislation, then the intermediary is responsible for calculating the amount of the Deemed Payment. This deemed payment normally arises at 5 April each year. All payments and benefits received by the intermediary from relevant engagements in the tax year must be totalled. The intermediary must operate PAYE and pay Class 1 NICs on all earnings from the engagement (known as a relevant engagement), after deducting a limited allowance for expenses and capital allowances, pension contributions, secondary class 1 NICs, and in-year salary and taxable benefits. The resulting amount will normally be treated as paid at the end of the tax year, and be taxed as a payment chargeable to income tax as employment income and subject to Class 1 NICs.

You can submit a contract to HMRC for an opinion.

Client

Where the legislation applies and the worker provides services to the Client there is no obligation on the client to account for the worker’s tax and NICs.

Composite/Managed Service Companies

It is sometimes thought that the use of composite and managed service companies is a way in which to avoid the appropriate tax and NICs liability - it is not.

Composite and managed service companies are required to operate PAYE where they pay a salary or where a particular engagement falls within the legislation and a deemed payment arises.

Agencies

There is often a recruitment agency in the chain between the worker and the end user of his services in addition to a service company or partnership. However, the legislation is drafted in such a way that it is very unlikely that a recruitment agency would meet the conditions relating to an intermediary. The liability for tax and NICs normally rests with the service company or partnership.

Scheme promoters

We request that you make the workers fully aware of the terms, conditions and possible IR35 implications of the relevant engagement they are entering into.

Further information is available by contact you local HM Revenue & Customs office or by visiting www.hmrc.gov.uk

New Consultant Joins Piper Recruitment

info@piper-recruitment.com — Tue, 07 Aug 2007 14:00:23 +0100

Piper Recruitment Ltd are pleased to announce that Adrian Buckley is to join our expanding operation as of Monday 28th January 2008.

Adrian joins Piper Recruitment Ltd with over 15 years recruitment experience, several of which have been within the specialist engineering fields.

Adrian will add strength and support to our Nuclear, Oil & Gas and Defence sections of our business, having gained experience within these fields during his previous employment.

We welcome Adrian to the team and look forward to him growing with the business in due course.

Piper Recruitment Limited News