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View Full Version : Where does the buck stop? Agency >Consultancy >PSB



Agent
15th May 2017, 15:46
Read through tons of articles and the answer still isn't clear, can anyone help with where the NI & Tax liability would lie in the below scenario;

Agency supplies IT contractor to Consultancy ==>> Consultancy supply workers (not services) to Public Sector Body

The supply of workers from the consultancy is project based and there will be no mention of the specific PSB on the contract that the agency has with the consultancy. Consultancy will supply a mixture of permanent and contract workers on site at the PSB.

In this situation, where is the liability? With the consultancy or with the agency?

Apologies if it's been asked before, I did search but just found that it's a bit of a grey area.

malvolio
15th May 2017, 16:38
Which liability? Determination of status, which is the hiring PSB, or payment of taxes due, which is the last body in the chain before YourCo.

Either way, the role as described will be inside IR35 regardless.

Agent
16th May 2017, 09:50
Which liability? Determination of status, which is the hiring PSB, or payment of taxes due, which is the last body in the chain before YourCo.

Either way, the role as described will be inside IR35 regardless.

Sorry, should have been clearer. I understand that the determination of in/out of IR35 will be down to the PSB, I mean the tax and NI liability. I know that in the draft legislation, this fell to the agency but I believe that it's changed? So if my agency is paying the contractor and he doesn't do things correctly then it will fall on me?

fannyadams
16th May 2017, 10:40
If the PSB decides that IR35 applies/does not apply, then it is up to the payer to deduct the right tax. If the decision is wrong, the payer is liable.

If the PSB decides that the engagement is out of scope of the new legislation (i.e. they don't have to make a determination) then the decision as to whether IR35 applies, and liability for taxes due, remain with the contractor.