In 2017 the Government made changes to legislation (often known as IR35) which result in increased responsibilities on public sector organisations who engage Personal Service Company (PSC) suppliers.

The new legislation aims to ensure that individuals who work through their own company pay employment taxes in a similar way to employees, where they would be employed by the public sector organisation were it not for the PSC or other intermediary that they work through.

Where the University engages a supplier through a PSC, the University will be responsible for assessing whether the off-payroll rules apply. If they do, the University will be liable and responsible for operating payroll and paying the correct taxes to HMRC.  The PSC will no longer receive the full invoice total, due to the deductions made to HMRC at the point of payment.

To see if the IR35 legislation applies to your specific engagement you can carry out a self-assessment using the HMRC tool on their website. The University is responsible for ensuring that suppliers who are covered by IR35 legislation are paying the correct amount of tax.

Failure to comply with the new legislation could lead to substantial financial penalties for the University. It is therefore important that we confirm supplier payment information before you can start working for us.

Processing PSC payments

The University processes PSC payments in the same way as all other suppliers e.g. the PSC will need a valid University Purchase Order and be expected to provide invoices. However in order to make payments via the Deemed Worker (PSC) payroll, additional information will be gathered from the PSC by the University’s Payroll Department.

For queries relating to payments for Personal Services Companies please contact: payrolldept@lincoln.ac.uk