The rules that apply to workers who provide their services to a public authority via their own limited company changed from 6th April 2017.
Previously the obligation was on the worker to decide whether a contract performed was caught by the ‘intermediaries legislation’ (known as IR35) however since the 6th April 2017 it is the responsibility of the public body or agency supplying the worker to the public body to decide if the ‘intermediaries legislation’ applies.
IR35 is tax legislation introduced to identify what is known as ‘disguised employees’, these are workers who would be considered employees of the client if it were not for the existence of their personal limited company. From the 6th April 2017 if a public sector client deems your contract to be caught by IR35 legislation then they are required to deduct PAYE tax and Class 1 National Insurance from your invoice before paying it. They are also required to pay Employers National Insurance over to HMRC.