• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

Agent wants me to sign ESM2051 (IR35 Q)

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    #11
    Originally posted by TheCyclingProgrammer View Post
    All it says is that you agree to deduct the appropriate income taxes from any remuneration paid in connection with your supplies to the agent.

    Fortunately you are not paid anything in connection to the services provided, YourCo is.

    YourCo remunerates you in the form of a small modest salary in connection with your duties as company director and as a shareholder it pays you dividends as an when profit allows. Neither of these things have anything to do with the agent or the end client or the contract. You would be paying these even if you were on the bench.
    I agree with this right up until 6th April 2020.

    I guess we should have asked for the duration of the contract.
    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
    - Voltaire/Benjamin Franklin/Anne Frank...

    Comment


      #12
      Originally posted by rapsberry View Post
      I understand this as an indicator that the end client will put everyone inside IR35 from April 2020 and by signing this form I give my agreement.

      Does it mean I’m safe to continue to pay taxes as if Outside IR35 before April? Or I have to pay “inside” taxes from the moment I sign the form?

      My contract is expected to run beyond April next year.
      This puts you in a bad position. Read it carefully! What it states is now you are classed inside ir35 all work done precariously with same client would be under investigation. If HMRC wants money for full contract then you have to fork it out.

      The client from signing the paper should be the one paying the tax not you as it's taking it out from source making your ltd redundant.

      You can take it either way but both are at risk to you. Pay tax from signing but will flag whole contract as inside or wait till 2020 when it's taken from the client but under investigation you could be hit with a massive tax if it becomes retrospectively done against you.

      Just like to add HMRC did state they won't be going after anyone after 2020 when in same position but has chanced ir35 status but I don't believe that for 1 second.

      I would highly recommend talking to an ir35 specialist and weigh up your options to mitigate your risk.

      Comment


        #13
        Originally posted by cojak View Post
        I agree with this right up until 6th April 2020.

        I guess we should have asked for the duration of the contract.
        I was offered 6 months contract extensions until mid April 2020. I haven’t signed neither contract or ESM2051 form yet.

        Would it be reasonably safe to ask for 5 months extension and sign the form?

        It looks to me the agent wants me to sign it because the contract finished after new IR35 rules come.

        Comment


          #14
          Originally posted by rapsberry View Post
          I was offered 6 months contract extensions until mid April 2020. I haven’t signed neither contract or ESM2051 form yet.

          Would it be reasonably safe to ask for 5 months extension and sign the form?

          It looks to me the agent wants me to sign it because the contract finished after new IR35 rules come.
          That’s certainly my impression.
          "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
          - Voltaire/Benjamin Franklin/Anne Frank...

          Comment


            #15
            Originally posted by cosmic View Post
            This puts you in a bad position. Read it carefully! What it states is now you are classed inside ir35 all work done precariously with same client would be under investigation.
            I think you should read it carefully. That is *not* what it says. Read ESM2051.

            All it actually says that any remuneration that YourCo pays yourself *in relation to the work performed for the agency or end client* is taxed appropriately. So long as you are operating PAYE on any *salary* paid *in relation to the work* then you are complying with the rules as outlined.

            However I repeat:

            * Your director salary is not remuneration paid in relation to work performed for the agency or client. It is a salary for your services as company director.
            * Even it if were deemed as being in relation to work performed for the agency, it still only means that any salary you pay should be taxed appropriately. It does not mean you are accepting you are inside IR35.
            * Dividends are not remuneration.
            Last edited by TheCyclingProgrammer; 27 September 2019, 14:08.

            Comment


              #16
              Originally posted by TheCyclingProgrammer View Post
              I think you should read it carefully. That is *not* what it says. Read ESM2051.

              All it actually says that any remuneration that YourCo pays yourself *in relation to the work performed for the agency or end client* is taxed appropriately. So long as you are operating PAYE on any *salary* paid *in relation to the work* then you are complying with the rules as outlined.

              However I repeat:

              * Your director salary is not remuneration paid in relation to work performed for the agency or client. It is a salary for your services as company director.
              * Even it if were deemed as being in relation to work performed for the agency, it still only means that any salary you pay should be taxed appropriately. It does not mean you are accepting you are inside IR35.
              * Dividends are not remuneration.
              I have omitted the first paragraph from the agent's letter, adding it now for better clarity:
              You are responsible for payments to <MY REAL NAME> and any other individuals providing services through your organisation (“Representative”), and for accounting to HMRC for the Taxes on all payments made to the Representative.

              Comment


                #17
                Originally posted by rapsberry View Post
                I have omitted the first paragraph from the agent's letter, adding it now for better clarity:
                You are responsible for payments to <MY REAL NAME> and any other individuals providing services through your organisation (“Representative”), and for accounting to HMRC for the Taxes on all payments made to the Representative.
                Yes, YourCo is responsible for deducting at source any necessary taxes from payments made to you where applicable. For salaries this means operating PAYE.

                Dividends are irrelevant. They are not payments for services. They are a distribution of profits to shareholders. You are responsible for ensuring you pay the correct tax on any income you receive that is not taxed at source.

                Comment


                  #18
                  ESM2051 simply says that if you are working under supervision, direction or control, then agency legislation applies and your limited company must pay PAYE on your remuneration. If you don’t do that, the liability can fall back to the agency, so it’s reasonable enough that the agency asks you to almost indemnify them.

                  As a contractor not operating inside IR35, I would assume that you are not working under a substantial amount of control, so the agency legislation is not an issue and so neither you, your company nor the agency are at risk, and it’s fine to sign the letter.

                  Then, to state the obvious, you have to consider whether IR35 applies, and although that’s got nothing to do with the agency before April 2020, it will help you to get an accurate review of your situation now.







                  Sent from my iPad using Contractor UK Forum

                  Comment

                  Working...
                  X