Public sector contractors are being urged to submit all of their invoices prior to 6 March 2017, in order to ensure that payment is received before the new April rules regarding IR35 are rolled out.
The UK's contractor trade group, the Association of Independent Professionals and the Self-Employed, (IPSE) has issued the warning to contractors, saying that once the 'punitive' new tax charges are brought in on 6 April, things could look very different.
If contractors do not manage to submit their invoices and get them paid before 6 April, they could see their payments suffer as a result of these new charges. From that date, all payments made from public sector clients or agencies via which the end-user is a public sector body, could well be made through RTI, which has traditionally only been used for staff. This is because end-users will place all public sector contractors on RTI rather than spending the time assessing each individual's IR35 status, as the new rules due to come in in April will oblige them to do.
IPSE chief executive, Chris Bryce, said: "Evidence is already emerging that public sector clients are unwilling, or unable, to make the IR35 assessment. [So] regardless of their [PSCs’] status and without considering whether this reflects the reality of the arrangement…from 6th April, tax and NICs will be deducted at source.”
“Any contractors which invoice one month in arrears, on 30-day payment terms, will need to get their invoices issued in the first week of March. [And] any work completed during March but paid for after the 6th of April will be subject to the new rules – I’d recommend insisting on weekly or even daily payments if you can, in order to minimise the losses you will suffer as a result of this ill thought out legislation.”