PSC Crackdown – Fact or Fiction?

You may have read some articles in the news over the weekend such as this one by The Guardian, suggesting a further clampdown on PSCs (personal service companies).

The article makes some rather worrying statements about changes, including “that a consultant using a personal service company would be obliged to move on to the payroll if they work for a business for more than a month.”

It goes on to claim that the government has acknowledged that this might be restrictive for a lot of genuine workers operating through a PSC, stating that “some IT workers might work for a company for a short period or they might work for multiple companies at the same time. In that case they would not be seen as an employee. Builders doing one job on a private house would be exempt.” However, professionals such as lawyers working for a single client “should be counted as employees and should pay income tax”.

The IR35 Discussion Document released in July, although almost assuredly will lead to reform, did not hint at any such overly punitive rules, so we suspect that this is largely speculative journalism and would advise contractors not to panic just yet.

George Osborne’s Autumn Statement is on 25th November, so hopefully all will be made clear then.

By:Gemma Cakebread

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