LTD Company/PSC Sub-contractor Engagement

Quite simply IR35 is a piece of legislation aimed at weeding out contractors operating as a Limited company (and enjoying the tax benefits) who should actually be classified as ‘Employees’ of the end hirer. The IR35 test looks at a number of factors to determine if the contractor is operating ‘inside’ or ‘outside’ the rules for each assignment and whether the income on that assignment should be subject to PAYE taxes or not.

If you are a legitimate and genuine Personal Service Company you should have nothing to worry about and be able to operate in the same self employed way. Omnia can help to ensure that all the relevant checks and assessments have been carried out on your assignment to determine the correct IR35 status.

All individuals registered with HMRC will have a ‘UTR – Unique Tax Reference’ which is used to identify the tax payer and ensure the correct amounts are paid each year depending on declared earnings.

The Construction Industry Scheme is a set of rules applicable to any Contractor/Sub-contractor carrying out work in the Construction Sector. All contractors must register on the scheme with HMRC and have deductions for tax taken from any payments made to them at source. The deductions will be at one of three levels decided by HMRC:

1. Higher – 30% deduction
2. Net – 20% deduction
3. Gross Status – no deduction from payments

Omnia will verify every sub-contractors UTR with HMRC to ensure the correct deductions are taken and paid to HMRC. The sub-contractor must complete a self-assessment at the end of the tax year and maybe entitled to a CIS tax rebate (after deduction of expenses) if too much tax has already been paid.

Yes, as a Limited company director you are responsible for maintaining your own insurance for the work you do. This will normally include Public Liability and Professional Indemnity insurances.