IR35: Expenses - Question 1
Personal Service Company workers will be worse off than ordinary employees under the legislation because they will only be able to claim 5 per cent of their expenses.
This is not correct. PSCs will be able to claim a flat rate deduction of 5 per cent of the gross fees receivable for any relevant engagements. This 5 per cent deduction is not available to employees but will be allowed for PSCs to enable them to meet the additional costs of providing their services in this particular way.
In calculating the salary on which they are obliged to deduct employment
income tax and NICs, workers will also be able to deduct all expenses that
would normally be available to direct employees.
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