0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

personal Service Companies and Income Tax: New HMRC “IR35” tests

11 May 2012

HMRC have published further guidance on how they will decide if personal service companies (PSCs) fall inside the “IR35” rules, and so are required to account for PAYE and national insurance contributions. It may just be coincidence that this follows the recent publicity around use of PSCs by individuals working in the public sector.

The new guidance sets out twelve “Business Tests” with questions to help decide if a PSC would be caught by “IR35”, and each test has a score depending on the answer. The aggregate score from all twelve tests can then be used to decide if the PSC is in low, medium or high risk categories. The tests are not an exact science, and HMRC give examples of some situations that would be borderline, as well as those they think would be caught or not.

The tests are voluntary, but may well be useful for people either looking to set up a PSC, or who already have one, to gauge HMRC’s approach.

related opinions

Employer's beware: Government announces changes to IR35

The Chancellor, Phillip Hammond, has just delivered his latest budget and with it, a significant change to the way liability for IR35 breaches will be dealt with for private sector companies from April 2020.

View blog

Leaked 'Panama Papers' reveal vast array of offshore companies and trusts

Approximately 11 million documents have been leaked from Panamanian law firm Mossack Fonseca, which specialises in commercial and trusts law…

View blog

In force: Senior Managers and Certification Regimes

This week sees the implementation of the Senior Managers and Certification Regimes as well as the Senior Insurance Managers Regime, designed to reform behaviour and promote individual accountability in the banking and insurance sectors.

View blog

Bearer shares - act now

Under the provisions of the SBEEA the holders of bearer shares have until 26 February 2016 to voluntarily surrender them to the company for conversion…

View blog

mailing list sign up



Select which mailings you would like to receive from us.

Sign up