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Autumn 2017 Budget News

View profile for Anna Byford

The employment implications of this year’s Autumn budget are fairly light, however the government made it clear that it intends to enter into consultation next year which has the potential to impact the private sector’s approach to engaging workers via personal services companies (“PSCs”).

Consultation will take place in 2018 regarding whether or not the tax regime applicable workers supplying their services to the public sector through PSCs should be extended to the private sector. That regime places the onus on the entity engaging the worker to determine whether or not that worker is likely to be deemed to be an employee, and for the engaging entity to account for tax and NICs accordingly. In the private sector currently, the onus is on the worker providing services via a PSC to decide if, in the absence of the PSC, the worker would be an employee of the end-client and to deduct tax and NICs from the income received by the worker from the PSC. 

The impact on the regime in the public sector has seen a drop in workers providing services via PSCs, because they are seen as too risky from a tax perspective. Instead, those workers are engaged directly as employees. 

Research already conducted on this topic by the government is expected to be published in 2018.