Supply Models & Employment Status
Demystified
Presented by Samantha Hurley
Head of External Relations at APSCo
26th Septem...
PAYE
 Usually referred to as a temp worker
 Engaged/employed directly by
recruitment firm
 Taxed at source, like an emp...
Limited Company (PSC)
 Commonly referred to as contractors
 Engaged via own ltd company (PSC)
 Business to business con...
Umbrella Company
 Still ltd, engaged via CFS & paid gross
 Employed by umbrella company
 Tax benefit: travel & subsiste...
Self Employed
 Not common
 Individual engaged directly by
recruitment firm & paid gross
 Potential exposure to tax liab...
Advice to New Contractors
 Don’t give advice, give information
 Contractor: own research/own decision
 Some recruitment...
Employment Status
 Employment status tests:
– Control / Substitution / Moo / Rectification
 Employed
 Self-employed: di...
Importance of Employment
Status in Legislation
 AWR
– In business on own account outside scope
– Assumption all PSCs out ...
Importance of Employment
Status in Legislation
 IR35
– If in reality an employee despite PSC then
in scope
– If self-empl...
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Sam Hurley - APSCo - September 26th

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  • Sam Hurley - APSCo - September 26th

    1. 1. Supply Models & Employment Status Demystified Presented by Samantha Hurley Head of External Relations at APSCo 26th September 2013
    2. 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. 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. 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. 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. 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. 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. 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. 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

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