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Further to our post yesterday – https://www.whitefieldtax.co.uk/hmrc-personal-service-obligations/ – the promised draft legislation has been published in the form of an HMRC consultation:

Onshore Employment Intermediaries: False Self-Employment

From first glance this is aimed at employment agencies rather than PSCs and there should be little or no impact on a typical PSC – the intent appears to be to remove anomalies in the (Employment) Agencies Legislation applying to individual contractors / workers, not those working through PSCs – in fact this is a kind of IR35 / MSC rules variant for the Agencies Legislation.

By way of background the Agencies Legislation states that when an employment agency engages an individual they must have PAYE operated on them unless they are not under the agencies control (paraphrased).  That rule is one of the main reasons why PSCs proliferated around 25 years ago – yes that long, I remember fielding questions from an employment agency client when I was in my early 20s  – and it seems that complex structures are being introduced now to sidestep the control issue – this legislation seeks to block that.   That, of course, begs the issue, why not use PSCs for those clients?  IR35 is one reason, complexity possibly another.

Anyway, any thoughts about a change to IR35 / rules for PSCs following Autumn Statement seem to be receding – as always we will keep clients appraised.