Personal Service Companies - University of Oxford · Personal Service Company Remits PAYE The...
9
Personal Service Companies Helen Grieves Finance Division Tuesday 28 March 2017
Transcript of Personal Service Companies - University of Oxford · Personal Service Company Remits PAYE The...
Personal Service
CompaniesHelen Grieves
Finance DivisionTuesday 28 March 2017
Background to change
A PSC is a Limited
Company set up by
an individual
They are used for contract jobs as
many recruitment agencies and
engagers will not hire self-
employed individuals.
Currently, the PAYE
and NIC liability sits
with the PSC
From 6 April 2017, this liability
moves from the PSC to the Public
Sector employer – in this case, the
University.
You were asked to
inform Finance on
numbers of PSCs in
your department
The Finance Division will then
contact departments with next
steps.
HMRCUniversity
department
Individual
Personal
Service
CompanyRemits PAYE
The University engages and pays an
individual who is set up as a PSC.
The PSC remits PAYE
and NIC on the payment
made to the individual
The individual
typically receives a
combination of
salary and dividend
Current position
HMRC
Individual
Personal
Service
Company
The individual
receives a
payment from the
University via the
PSC
Position from 6 April 2017
The University is responsible for assessing
and where appropriate deducting PAYE and
NIC when engaging a PSC
University
department
Remits PAYE
The PSC no longer
remits PAYE and
NICs to HMRC
Any payment for services provided for the University’s
departments or its subsidiaries will be paid through the
University’s payroll unless the engager can certify, as evidenced
from HMRC’s Employment Service Status (ESS) tool, that they
are not liable for Pay As You Earn (PAYE) tax and National
Insurance.
University policy
1) HMRC can issue fines of up to five times the value of the
contract
2) Reputational damage
Risks of non compliance
Employment Service Status: online tool
– Released earlier this month
– Determines employment status
– Binding on HMRC if used
accurately/truthfully
– Replaces ESI tool
– www.tax.service.gov.uk/check-employment-
status-for-tax/setup
Implications
• Contract status
• Increased employers payroll costs
• PSC contractor is treated as an employee for tax purposes
• The individual will not automatically gain employment rights
Impact on the
individual
• Contract status
• Increased employers payroll costs
Impact on the
department
Next steps
Where
appropriate,
PSC
contractors
are brought
onto payroll
Departments
and PSC
contractors
use the ESS
tool to
determine
status -
ongoing
Finance
Division
contact
departments
who need to
take further
steps
Departments
return
information on
PSCs to
Finance
Division
If you have any queries, please contact us:
• Email: [email protected]
• Call: (6)16142
• admin.ox.ac.uk/finance/news/psc
Identify need for work, find resource and
complete HMRC ESS Tool
Dpts
Depending on outcome, decide how to contract
“Non-employee” “Employee”“Inconclusive”
Individual or Ltd co?
Departmental action flowchart
IndividualSend the invoice or PRF to Payments, with the ESS Tool
outcome attached
Ltd companyNotify Purchasing team
Complete the PSRSend the invoice with the ESS
Tool outcome attached
Contact HMRCPut onto Payroll
