VIEWSVIEWS & OPINIONOPINIO N


IR35, the days of using PSC s for supply work are gone


Comment by ADRIANMARLOWE,Managing Director, Lawspeed


The ability to hire temporary staff has been particularly valuable to the education sector for years. More recently many teaching supply staff or other staff such as IT technicians, have wanted to work through thei companies (PSCs), even easier for hiri


ng managers. making life r own


However there is shortly to be a change in the tax laws that affects the hire of PSCs.


Under the tax rules known as IR35, PSCs have to decide their ‘status’ to HMRC, indicating whether the engagement would be deemed to be employment for tax purposes were it not for the use of their PSC.Where ‘employed’ the amount of tax and NICs increases (i.e. lower net income for the individual) so unsurprisingly most PSCs declare ‘no employment’ and insist on using ‘IR35 friendly’ contracts to help minimise risk. This is now set to change. From April 2020, the employment status decision will switch to the hiring establishment, with obligation to inform the PSC of the decision.Where the status is ‘employment’, the hirer will have to account to HMRC for PAYE and both employee and employer NICs based on the PSC invoice charge for work done. An incorrect decision or failure to make one creates exposure, and only where a ‘no employment’ decision is correct and advised will a hirer safely be able to pay the PSC gross.


Using a recruitment agency does not alleviate risk or the IR35 rules. Although the agency makes the payments, t he hirer remains responsible for the status decision and can still be liable if tax and NICs are not correctly accounted for down the chain.Whilst there may be temptation, hirers should be wary of third p offering insurance and status reviews, given that no the risk but simply change perception of it.


ne can remove arty solutions


Alternatives to hiring teaching supply staff operating through PSCs includes use of an agency that pays PAYE, umbrella companies, negotiating the rate and retaining the PSC or hiring as self-employed. This last option offers no panacea. Direct hire is risky if the individual is not to be actually employed, as it would invite claims for rights entitlement and/or demands from HMRC for tax and NICs.


margin charge recruitment ag


direct.


Umbrellas have mixed advantages. Unlike agencies, umbrellas cannot provide a work finding service, so cannot legally search for and propose workers for hire. They apply an employment charge so individuals then receive a lower pay packet and they are not regulated in the same way as recruitment agencies.


Negotiating new rates is a mathematical exercise, but many would question why supply teachers and the like would retain use of a PSC whe n paid a lower sum net of taxes .


Whilst it has always been easier to hire a PSC than an individual, concluding ‘no employment’ status for supply teaching staff would seem near impossible. Except where key individuals required such as IT staff for specific projects, the days of using PSC as a vehicle for most staffing requirements may well be gone.


Other options offer a safer approach. The first, using regulated encies to supply workers is a clear solution. Their should be balanced against cost savings in recruiting


Howandwhywe need to support


Institute of Physics


Imagine training as a paediatrician and then spending your day doing


orthopaedic surgery. Or training as a pharmacist and then being asked to ignore that expertise and desig n electronic circuits.


This is the predicament we put


thousands of teachers in when we ask themto teach nuclear physics or forces andmotion when their background and heart is in biology or chemistry.


A recent Education Policy Institute Report puts the proportion of physics teachers with a relevant degree at 50%, with that figure being even lower in themost economically deprived areas – just 17% in the poorest areas outside London (EPI, August 2018). is concerning for two fundamental reasons:


• First This


ly, andmost importantly, we can’t expect to inspire future generations to discover a love for physics whilst being taught by those teaching a subject that isn’t their passion


• Secondly, teachers aremore likely to leave the profession if they’re assigned to classes they don’t feel qualified to teach. A recent study in America (Metropolitan Life) discovered they can be up to 1.9 timesmore likely to leave teaching if put i So it remains a national priority to recruit


enough teachers with n this situation


suitable backgrounds and expertise to teach physics.


However, it’s not an easy fix. Currently, the share of graduates in teaching sixmonths after graduating is just 2.7%for physics graduates compared to 12.4%formaths, 12.4%for English and 8.4%for chemistry and biology (Institute for Fiscal Studies), so the critical shortage is likely to feature in schools for years to come. In themeantime, we owe it to the thousands of teachers who find themselves teaching under-19 physics without it being their primary area of expertise, a commitment to support themin every way possible and we believe a five-fold approach is the best way of doing that:


•When a teacher agrees or chooses to teach another science subj


bject, we need to provide extended subject knowledge enhancement courses either before or after Initial Teacher Education so that they feel properly prepared


•We need to create simple access to teacher endorsed resources to provide quality inspiration and back up


• Tea chers also need to be given easy way s of getting support fro m other physics teachers. Our online community talkphysics.org does just that - giving teachers one click access to a community in which they can ask questions, seek inspiration and discuss challenges and opportunities And we need tomake accessing CPD support simple. Logging onto www.iop.org/spark provides free online access to a wealth of CPD resources as well as a constantly updated glossary of physics terms, while talkphysics.org/event programme of no-cost CPD workshops, c • Ultimately, we need, where possible, to g


ive teachersmore options onferences and events s details a rich


about which sciences they teach because a degree in one of the sciences does not imply the necessary desire or skills to teach all three


thousands of teachers each year – to inspire students in a subject that isn’t their subject of choice.


Through real need we are asking the almost impossible of bj


bj If those teachers are prepared to rise to


that challenge, everyone invested in seeing physics as a subject thrive needs to step up too, to helpmake that cha ultimatelymore rewarding.


Octobe r 201 9 2019 www. wwweducation-toda y.co.uk


.co.uk 12 llenge less daunting and


rt the thousands of non-


specialist teachers teaching physics in our classrooms today Comment by CHARLES TRA


RACY, Head of Education,


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