1. Supply Models & Employment Status
Demystified
Presented by Samantha Hurley
Head of External Relations at APSCo
26th September 2013

2. PAYE
 Usually referred to as a temp worker
 Engaged/employed directly by
recruitment firm
 Taxed at source, like an employee
 Suitability: anyone, normally lower-paid

3. Limited Company (PSC)
 Commonly referred to as contractors
 Engaged via own ltd company (PSC)
 Business to business contract (CFS)
 PSC is paid gross
 Referred to: “genuinely self-employed”
 Has to administer company
 Not really suitable for lower-paid/
skilled

4. Umbrella Company
 Still ltd, engaged via CFS & paid gross
 Employed by umbrella company
 Tax benefit: travel & subsistence
 Compared to PSC: some tax benefit
without hassle of running business
 Can be suitable for anyone
 Not Managed Service Companies
(MSCs)

5. Self Employed
 Not common
 Individual engaged directly by
recruitment firm & paid gross
 Potential exposure to tax liability for
recruitment firm
 Not many recruitment firms will use this
model

6. Advice to New Contractors
 Don’t give advice, give information
 Contractor: own research/own decision
 Some recruitment firms have umbrella
PSLs:
– regular due diligence
– don’t recommend
– give them a choice
– APSCo affiliate

7. Employment Status
 Employment status tests:
– Control / Substitution / Moo / Rectification
 Employed
 Self-employed: directly or through PSC
 Agency Worker
– PAYE temp
– Umbrella company contractors

8. Importance of Employment
Status in Legislation
 AWR
– In business on own account outside scope
– Assumption all PSCs out of scope
– Agency Worker in scope
 Conduct Regs
– PSC & umbrella contractors can opt out
– PAYE contractors in scope

9. Importance of Employment
Status in Legislation
 IR35
– If in reality an employee despite PSC then
in scope
– If self-employed then outside scope
– If inside declare all earnings as income