Inside IR35 guide for public PSCs updated

A specialist advisory to contractors has updated its guidance to ContractorUK on working inside IR35 in the public sector.

Orange Genie first composed the exclusive guide six months before the sector’s IR35 reforms hit in April, to help contractors who planned to adhere to them while retaining their PSC.   

But in November, a month after the guide was published, Autumn Statement 2016 unveiled two measures with the direct effect of making PSC usage less profitable

These measures alter calculations made in the guide. They also complicated matters by taking effect in the very same month as the IR35 reforms. Neither were subjected to consultation.

And the measures left little preparation time, given that they were unveiled in late November but applied from early April. It is these measures that the new 'inside IR35' guide covers. They are:  

Added together, the effect of these two measures effectively cancels out the “small [earnings] advantage” that a public-serving PSC inside IR35 initially had, over a PAYE umbrella model.

It is the former (PSC inside IR35) that the initial guide favoured, but the new guide states that for “many” contractors, an umbrella will be more favourable thanks to the two measures.

Editor’s Note: Related –

Contractors’ Questions: How to work as a contractor under the new IR35?

Why umbrellas aren’t a must for IR35-caught PSCs

Moving from a PSC to an umbrella: is it worth it?

Jul 25, 2017