What goes up the chimney down, but can't come down the chimney up?

    As I’m sure you’ve guessed, the answer is, of course, an umbrella.

    And staying with riddles: many feel that would accurately describe the new rules affecting IR35 in the public sector.  But for some practices, the new rules don’t just create a conundrum; they are a genuine threat to the firm’s business.

    If your firm has a number of PSC clients operating in the public sector, you might find that from April 6th their engagements are deemed ‘caught by IR35’ and they will be having tax and NICs deducted at source (and for good measure, may see their day rates slashed to fund the employer’s NICs).

    Suddenly, operating through their limited company won’t make much financial sense and they may opt to close down their PSC.  

    That’s lost compliance income for your firm… but it may also present an opportunity.

    Practices already recognise the value of setting up their own umbrella companies, but also appreciate that it brings with it new compliance burdens: contracts for services with agencies and other intermediaries, contracts of employment for umbrella employees, understanding the complexities of workers’ rights, pay and entitlement to expenses.

    That’s where Accountax can help with the initial set up and the continued successful, compliant operation of the umbrella company.  

    Suddenly, a legislative change which seems like it could drive profits down, can be turned into a genuinely protective measure to drive fee income back up.

    If you would like to know more about the operation of an umbrella company, please contact Accountax on 0345 0660 035 or mail@accountaxconsulting.com