If you are an experienced contractor then it is likely that you will have established a preferred way of operating when fulfilling an assignment and we will be happy to discuss this with you. IRS Recruitment offers work finding services on a no fee basis to individual contractors as well as individuals whose services are provided through a Limited Liability company (PSC).
If you are a new contractor it is very important that you understand the implications of the different ways of working and make an informed decision on what is right for you. At IRS Recruitment there are number of different ways you can operate; the three main ones are:
This is where the individual performs an assignment and IRS Recruitment pays the individual for the approved hours or days worked. The individual enters into a PAYE contract relationship whereby IRS Recruitment deducts tax and National Insurance from the contractor's gross pay.
PAYE contractors working full time (pro rata for part time) will also be entitled to a basic 28 days statutory holiday per annum. It is important to remember that this is NOT a contract of employment. It is a Contract for Services and you will not be an employee.
PAYE contractors will normally be considered "in scope" for the purposes of the Agency Workers Regulations (AWR).
Providing services as an Umbrella company contractor
Some contractors prefer to work through an Umbrella company for the supply of their services. Essentially an Umbrella company acts as an employer to agency contractors who work under a fixed term contract assignment. The Umbrella Company will make a charge to the contractor for using their services. IRS Recruitment would issue a contract to the Umbrella Company and the Umbrella Company would make payment to the contractor.
Providing services through a Limited Company (PSC) – Business to Business basis
Many contractors who are in business on their own account prefer to use the services of an agency rather than spend lots of time and expense in marketing their services to potential clients in the industry sectors that they operate. IRS Recruitment also offer work finding services to contractors whose services are supplied through a Limited Liability Company (PSC).
Any contractor who wants to work through a Limited Company will be sent a Personal Service Company (PSC) Contract. Under this model, the onus is on the individual contractor to ensure that they pay the appropriate taxes.
IRS Recruitment is unable to operate through the following contracting models:
A sole trader is a business that is owned by one person but has not been registered as a limited company and so the owner is personally liable for any debts the business incurs and this liability is unlimited.
We are unable to work with sole traders because the Income Tax (Earnings and Pensions) Act 2003 - and previous acts - prevent 'self-employment' when an agency is involved as the obligations of the Act requires that we would have to treat the contractor as an 'employee' and deduct PAYE and National Insurance at source.
IRS Recruitment do not contract with offshore and overseas limited companies where a worker provides services in the UK through a limited company registered abroad. Where a contractor is working and living in the UK then they are subject to UK jurisdiction and should be liable for UK Income Tax and National Insurance.
In addition, where a UK based contractor provides their services to a UK based end client via an offshore company, HMRC has special anti-avoidance provisions to protect against a loss of Income Tax, and National Insurance contributions. If the offshore company has not paid the correct amounts to HMRC in the UK, HMRC can make the end client liable for these.