“Inside IR35” Deemed Employees – Holiday and Pension Payments through your Personal Service Company

Whether you role falls “Inside IR35” or “Outside IR35”, you can continue to work through your own Personal Service Company.

For Assignments where you are deemed to be ‘Inside IR35’ then you may be able to continue to operate through your own PSC, but your PSC would be paid a net amount after tax and other employment costs have been deducted from your gross pay.

Frequently Asked Questions:

If the Contractor is working through their own limited company and we are making deemed employee payments to their limited company, do we have to

1. Make an Allowance for Holiday Pay: No, as their Limited Company is their Employer
2. Keep the Holiday Allowance the Same as Permanent Employees because of AWR: No, as their Limited Company is their employer so they would be making an AWR claim against themselves
3. Make Pension Contributions: No, as it will be down to them to make contributions via their company
4. Deductions to cover Employee’s National Insurance and tax: Yes, these Emoluments will be deducted from the Rate by Eaglecliff and the Contractor will be paid the Net amount
5. Deductions to cover Employer’s National Insurance: Yes, an allowance for Employer NIC needs to be negotiated into the Contract Rate and this will be deducted by Eaglecliff before payment to the Contractor

VAT

This should still be charged in the normal way on the total value of the Invoice.
VAT will be paid to the PSC in full, along with the Net amount of Fees payable in relation to the Services