IR35 - been offered a contract inside and not sure how it compares in my situation...

[GhostofTarbera]

Yeah - this is probably what I'll probe a bit more come Monday when I'll hopefully have some paperwork, and then I'll be able to make sure that Employers NI isn't being deducted from the day rate that was advertised to me.
I'd be very surprised if it is - when the rules are that those costs can't be directly or indirectly passed onto the worker, if a public sector department is in breach of their own governments rules then it's probably scandalous.

I bet you a million pounds it is, as is 100% of all cases we have seen here.

Like your optimism


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[eek]

I bet you a million pounds it is, as is 100% of all cases we have seen here.

Like your optimism


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+1 agencies use Smurf rates when talking about inside IR35 contracts (as Dave Chaplin calls them), when they should be advertising salary based rates (as the OP seems to believe the inside IR35 rate is being advertised at).

Has the agency provided you with the Key Information document that they should be sending out since April 6th Providing a 'Key information document' for agency workers: guidance for employment businesses - GOV.UK

[jatt17]

+1 agencies use Smurf rates when talking about inside IR35 contracts (as Dave Chaplin calls them), when they should be advertising salary based rates (as the OP seems to believe the inside IR35 rate is being advertised at).

Has the agency provided you with the Key Information document that they should be sending out since April 6th Providing a 'Key information document' for agency workers: guidance for employment businesses - GOV.UK

I've not been in contact with an agency, I was put forward directly to the public sector client by someone who is employed by them and after conversations with them, they've told me they are keen for me to join. I'm still to hear what's next in getting the ball rolling but all I know so far it's a 6 month rolling contract, deemed inside IR35 and the day rate is £550 - that's what the public sector client has advertised to me as the worker.

[jamesbrown]

I've not been in contact with an agency, I was put forward directly to the public sector client by someone who is employed by them and after conversations with them, they've told me they are keen for me to join. I'm still to hear what's next in getting the ball rolling but all I know so far it's a 6 month rolling contract, deemed inside IR35 and the day rate is £550 - that's what the public sector client has advertised to me as the worker.

I still think it's more likely than not that they've quoted the "wrong" rate, but we'll see - you may be right.

For existing contracts, it's hard to get away with deducting these employment costs from the existing rate (without legal challenge), which is one reason (among many) that so many contracts will get canned leading up to April 2021. For new contracts, there will be a lot of confusion around the true rates and most of that will be obfuscation by agents.

[jatt17]

I still think it's more likely than not that they've quoted the "wrong" rate, but we'll see - you may be right.

For existing contracts, it's hard to get away with deducting these employment costs from the existing rate (without legal challenge), which is one reason (among many) that so many contracts will get canned leading up to April 2021. For new contracts, there will be a lot of confusion around the true rates and most of that will be obfuscation by agents.

In all honesty - if they've quoted me the "wrong" rate then i'm not even going to considerate it for a minute, not just because of the difference in money but because they want to deem me an employee yet get me to pick up the employers tax bill - so that would be a 100% no.

If they've offered me the "right" rate then I'll probably be up for it, because it'd work out pretty much exactly the same as the normal rates I've had so far (circa £450).

Let's see. It's all good - I've got other stuff on the cards that's "outside".

[elsergiovolador]

In all honesty - if they've quoted me the "wrong" rate then i'm not even going to considerate it for a minute, not just because of the difference in money but because they want to deem me an employee yet get me to pick up the employers tax bill - so that would be a 100% no.

If they've offered me the "right" rate then I'll probably be up for it, because it'd work out pretty much exactly the same as the normal rates I've had so far (circa £450).

Let's see. It's all good - I've got other stuff on the cards that's "outside".

The client most likely pays the intermediary that deducts taxes a day rate that is all inclusive - it also includes Employer's NI and Apprenticeship Levy. If they said you get 550 after employer taxes, then likely the client pays about 630 per day. Contractor pays employee and employer tax when caught inside. Fee payer will not magically come up with money to cover this tax, so the client pays the rate that includes it.
HMRC tried to hide this fact behind semantics to make MPs accept this absurd.

[jamesbrown]

The client most likely pays the intermediary that deducts taxes a day rate that is all inclusive - it also includes Employer's NI and Apprenticeship Levy. If they said you get 550 after employer taxes, then likely the client pays about 630 per day. Contractor pays employee and employer tax when caught inside. Fee payer will not magically come up with money to cover this tax, so the client pays the rate that includes it.
HMRC tried to hide this fact behind semantics to make MPs accept this absurd.

KUATB. The client is the fee payer.

[PurpleGorilla]

In all honesty - if they've quoted me the "wrong" rate then i'm not even going to considerate it for a minute, not just because of the difference in money but because they want to deem me an employee yet get me to pick up the employers tax bill - so that would be a 100% no.

If they've offered me the "right" rate then I'll probably be up for it, because it'd work out pretty much exactly the same as the normal rates I've had so far (circa £450).

Let's see. It's all good - I've got other stuff on the cards that's "outside".

Does it matter if you pay the employer NI?

Look at the net money in hand after all the taxes.

If the money is good; forget the rest of it.

Life’s too short!


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[elsergiovolador]

KUATB. The client is the fee payer.

Depending on the setup, but I think that's rather rare. Fee payer is whatever pays the tax. Even if it was the client, the same situation applies.

[jamesbrown]

Depending on the setup, but I think that's rather rare. Fee payer is whatever pays the tax. Even if it was the client, the same situation applies.

The fee payer is the intermediary that pays the fees. The OP has already confirmed that they are direct to the client.