PDA

View Full Version : And the first leg is removed



eek
23rd November 2016, 13:38
4.11 Off-payroll working rules – Following consultation, the government will reform the offpayroll
working rules in the public sector from April 2017 by moving responsibility for operating
them, and paying the correct tax, to the body paying the worker’s company. The government
believes public sector bodies have a duty to ensure that those who work for them pay the right
amount of tax. This reform will help to tackle the high levels of non-compliance with the current
rules and means that those working in a similar way to employees in the public sector will pay
the same taxes as employees. In response to feedback during the consultation, the 5% tax-free
allowance will be removed for those working in the public sector, reflecting the fact that workers
no longer bear the administrative burden of deciding whether the rules apply. (43)

Yorkie62
23rd November 2016, 13:55
It's worse than that they are going to introduce new measures to clamp down on disguised renumeration as a way of tax management.

And flat rate vat now at 16.5% which approximates to 20% of net. So effectively abolishing flat rate vat.

BrilloPad
23rd November 2016, 13:57
In response to feedback during the consultation, the 5% tax-free
allowance will be removed for those working in the public sector, reflecting the fact that workers
no longer bear the administrative burden of deciding whether the rules apply. (43)

Wow!

ladymuck
23rd November 2016, 14:18
Never mind all the other costs of running a business. I guess PS contractors also don't need to pay for PII, or their accountant, and will receive paid holidays?

eek
23rd November 2016, 14:23
Never mind all the other costs of running a business. I guess PS contractors also don't need to pay for PII, or their accountant, and will receive paid holidays?

Nope you will be directed towards an umbrella company - the agency's aren't going to accept any risk here (as screw ups are now their responsibility)...

BoredBloke
23rd November 2016, 14:27
Things should get interesting the closer we get to April.

youngguy
23rd November 2016, 14:28
What about pension payments?

eek
23rd November 2016, 14:44
What about pension payments?

I really don't think my request for all income from this contract to be paid into their final salary pension scheme is going to be acceptable.

youngguy
23rd November 2016, 14:47
I really don't think my request for all income from this contract to be paid into their final salary pension scheme is going to be acceptable.

That was sterling idea.

So if there are no expenses how does a PSC (their term) provide for themselves in the later life.....or shall we all just expect the Gov to look after us?!

youngguy
23rd November 2016, 14:56
Nope you will be directed towards an umbrella company - the agency's aren't going to accept any risk here (as screw ups are now their responsibility)...

I can't see any benefit to running a ltd anymore for the contractor either?

cojak
23rd November 2016, 15:44
I can't see any benefit to running a ltd anymore for the contractor either?

Of course there is - you don't have the worry of the umbrella doing a midnight flit going into administation before you get paid. With a Ltd you still have ultimate control of your money.

BoredBloke
23rd November 2016, 15:50
Of course there is - you don't have the worry of the umbrella doing a midnight flit going into administation before you get paid. With a Ltd you still have ultimate control of your money.

Along with a lot of hassle and ever moving goal posts

eek
23rd November 2016, 15:51
Along with a lot of hassle and ever moving goal posts

Rule 1 of contracting get the money under your own control asap

BoredBloke
23rd November 2016, 15:53
Rule 1 of contracting get the money under your own control asap

It might be under your control but you are only keeping an ever increasing chunk of it safe for HMRC

youngguy
23rd November 2016, 16:13
Of course there is - you don't have the worry of the umbrella doing a midnight flit going into administation before you get paid. With a Ltd you still have ultimate control of your money.

Does that offset the effort though I wonder?

I guess if you are on weekly time sheets the risk exposure is only a couple of K.

missinggreenfields
23rd November 2016, 16:18
What about pension payments?

You don't make any. You have no expenses. If you incur an expense, you are trading illegally under the new rules.

Go to jail. Do not pass go. Do not collect your salary as a disguised employee etc.

youngguy
23rd November 2016, 16:23
You don't make any. You have no expenses. If you incur an expense, you are trading illegally under the new rules.

Go to jail. Do not pass go. Do not collect your salary as a disguised employee etc.

So let's say I am a PS contractors on 500pd (10k pcm).
I lose 4-5k in tax (??) At source
That leaves me c5k to personally live on and pay for my business expenses (unless I no longer need insurances etc) AND make personal pension payments ......wow

Tell me I am wrong and have missed something!

westtester
23rd November 2016, 16:50
So let's say I am a PS contractors on 500pd (10k pcm).
I lose 4-5k in tax (??) At source
That leaves me c5k to personally live on and pay for my business expenses (unless I no longer need insurances etc) AND make personal pension payments ......wow

Tell me I am wrong and have missed something!

I doubt that clients will want to forego business insurance, I was told to provide £5m liability cover for my current role! I can't believe I could do that much damage....

youngguy
23rd November 2016, 16:58
I doubt that clients will want to forego business insurance, I was told to provide £5m liability cover for my current role! I can't believe I could do that much damage....

But I am not a business, I am a disguised employee - the Chancellor told me so!

DotasScandal
23rd November 2016, 17:12
I am wrong and have missed something!

Yes. The fact that the Government doesn't want us contractor vermin to continue contracting. We are expected to clear the field for "Business" to take over... by "Business", we mean the big cartels that Gauke & friends love so much, the ones that get HMRC "sweet deals" and who Ms. May wants to keep happy.
It's a textbook case of disincentivization - they simply make individual contracting so unattractive that either new people don't the enter field, and old timers say "ah, f* it, it's just not worth the hassle anymore".

youngguy
23rd November 2016, 17:14
Yes. The fact that the Government doesn't want us contractor vermin to continue contracting. We are expected to clear the field for "Business" to take over... by "Business", we mean the big cartels that Gauke & friends love so much, the ones that get HMRC "sweet deals" and who Ms. May wants to keep happy.
It's a textbook case of disincentivization - they simply make individual contracting so unattractive that either new people don't the enter field, and old timers say "ah, f* it, it's just not worth the hassle anymore".

Obviously we need the detail and have to do the sums but if thete is no tax efficient way to make pension payments then contracting is all but dead and the big four and large SIs take over...something which Gov tried to start to break a few yrs ago.

The mind boggles

VectraMan
23rd November 2016, 17:20
So let's say I am a PS contractors on 500pd (10k pcm).
I lose 4-5k in tax (??) At source
That leaves me c5k to personally live on and pay for my business expenses (unless I no longer need insurances etc) AND make personal pension payments ......wow

Tell me I am wrong and have missed something!

I haven't seen anything about pensions, and pension contributions aren't part of the 5%.

youngguy
23rd November 2016, 17:29
I haven't seen anything about pensions, and pension contributions aren't part of the 5%.

That may be some consolation and I'd hope Gov allow ltds to continue to have this as a 'pre tax expense'. They should be encouraging us to save and look after yourselves as we get older surely.

BoredBloke
23rd November 2016, 17:31
Yes. The fact that the Government doesn't want us contractor vermin to continue contracting. We are expected to clear the field for "Business" to take over... by "Business", we mean the big cartels that Gauke & friends love so much, the ones that get HMRC "sweet deals" and who Ms. May wants to keep happy.
It's a textbook case of disincentivization - they simply make individual contracting so unattractive that either new people don't the enter field, and old timers say "ah, f* it, it's just not worth the hassle anymore".

I agree - the very same companies that they have lowered the corp tax for....you know, the ones who pay no corp tax!

MPwannadecentincome
23rd November 2016, 17:34
I haven't seen anything about pensions, and pension contributions aren't part of the 5%.

Also you have to fill in a tax form and you enter pension contributions on there, then you get tax relief. Unfortunately no NI relief :-(

youngguy
23rd November 2016, 17:36
Also you have to fill in a tax form and you enter pension contributions on there, then you get tax relief. Unfortunately no NI relief :-(

So how much worse off will contractors be?

northernladuk
23rd November 2016, 17:40
So how much worse off will contractors be?

Depends.

youngguy
23rd November 2016, 17:49
Depends.

Go on!

I appreciate we need more detail and the full doc, but I'd be interested in any fag packet idea .....this is due to a possible opportunity so ideally understanding what kind of % hit this may be would be useful and my brain is incapable of such accountancy

northernladuk
23rd November 2016, 17:51
Go on!

I appreciate we need more detail and the full doc, but I'd be interested in any fag packet idea .....this is due to a possible opportunity so ideally understanding what kind of % hit this may be would be useful and my brain is incapable of such accountancy

A bit.

youngguy
23rd November 2016, 17:53
A bit.

Well that's my mind blown. I bow to your knowledge

Andy Hallett
23rd November 2016, 19:34
Today's statement confirmed what we had long suspected and then some with the FR Vat change and 5% going.

The devil is in the detail, and all the way through the process the HMRC have struggled to explain the detail. Draft legislation is due to be published on 5th December.

In other news I have been selected to help UAT the new online status determination tool that same week!

jamesbrown
23rd November 2016, 19:36
UAT

That's an interesting way of putting it! :laugh

northernladuk
23rd November 2016, 19:36
In other news I have been selected to help UAT the new online status determination tool that same week!

Just a quick tip. None of the answers are 'Ask for two references' and when it asks about rates 'try and pocket 20% of it' probably isn't right either. ;)

Andy Hallett
23rd November 2016, 19:42
Just a quick tip. None of the answers are 'Ask for two references' and when it asks about rates 'try and pocket 20% of it' probably isn't right either. ;)

Good, not cutting our rates for anyone.

Andy Hallett
23rd November 2016, 19:44
Sweepstake on when this will his Private Sector? I am saying 2019

MrMarkyMark
23rd November 2016, 19:44
FTFY


Good, not cutting our rates for anyone, unless it started to affect our bottom line, or for any other reason we deem appropriate.

MPwannadecentincome
23rd November 2016, 20:02
Just a quick tip. None of the answers are 'Ask for two references' and when it asks about rates 'try and pocket 20% of it' probably isn't right either. ;)

20%? don't you mean 30 to 40%?

MPwannadecentincome
23rd November 2016, 20:03
I haven't kept up with any of the discussion on this, but if the intermediary (the agent) makes the determination does the PSC have the legal right to challenge their decision in a court?

MrMarkyMark
23rd November 2016, 20:12
Sweepstake on when this will his Private Sector? I am saying 2019

Lets see it at "works" in the PS first and discuss then.

Disappointed someone, in your position, thinks its all going to be rosy :)

ShandyDrinker
23rd November 2016, 20:21
Sweepstake on when this will his Private Sector? I am saying 2019

Gut feeling is you're spot on.


Lets see it at "works" in the PS first and discuss then.

Disappointed someone, in your position, thinks its all going to be rosy :)

Whether it "works" or not... the only message from govt will be that it has "worked". On the plus side everyone will be deemed to be a good little employee going via an agency. I also wonder how long it will be for even direct contractors to be hit too.

jamesbrown
23rd November 2016, 20:23
Sweepstake on when this will his Private Sector? I am saying 2019

Depends on the reaction. If there's an exodus from the PS (once the vast majority twig in the middle of 2017 :laugh), it could be 2018, given that the AS will disappear and the next full budget is Autumn 2017. As I understand it, the new Spring Statement (March 2017) will be very limited, so the next window is the full budget, Autumn 2017 (for April 2018).

Andy Hallett
23rd November 2016, 20:31
Disappointed someone, in your position, thinks its all going to be rosy :)

Not sure where you got that impression. I think it is going to be an unmitigated disaster with public sector bodies having to spend additional time and money resourcing much needed projects. It's at best wooden dollars, and worst putting public services in severe jeopardy when the big 4 get hired to plug the gaps compliantly at twice the price.

My scepticism about it moving to the private sector is because all the talk from HMRC has been about a 'level playing' field. They won't allow what is effectively a private sector subsidy to stay in place long term.

Sure agencies adapt our offering, and ironically as a big player we anticipate taking market share being seen as a safe haven. Do I think it's right or fair? no.

eek
23rd November 2016, 20:34
Depends on the reaction. If there's an exodus from the PS (once the vast majority twig in the middle of 2017 :laugh), it could be 2018, given that the AS will disappear and the next full budget is Autumn 2017. As I understand it, the new Spring Statement (March 2017) will be very limited, so the next window is the full budget, Autumn 2017 (for April 2018).

Nope there is Spring Budget 2017, Autumn Budget 2017, Spring Statement 2018, Autumn Budget 2018.

The change will require another consultation document (albeit its probably a done deal already) and the earliest that could come out would be Autumn 2017. Personally I think they would wait a whole year so Consultation (which can be launched at any time provided people are notified) in Spring 2018, sign off Autumn 2018, live 5/4/19...

administrator
23rd November 2016, 20:44
Not sure where you got that impression. I think it is going to be an unmitigated disaster with public sector bodies having to spend additional time and money resourcing much needed projects. It's at best wooden dollars, and worst putting public services in severe jeopardy when the big 4 get hired to plug the gaps compliantly at twice the price.

My scepticism about it moving to the private sector is because all the talk from HMRC has been about a 'level playing' field. They won't allow what is effectively a private sector subsidy to stay in place long term.

Sure agencies adapt our offering, and ironically as a big player we anticipate taking market share being seen as a safe haven. Do I think it's right or fair? no.

I have said this enough times already, they want everyone to pay their fair share" of taxes. From the AS today, I think it's been posted somewhere already on the forum:


Expected ONS classification changes have added £12 billion since Budget.

And tax receipts have been lower than expected this year, causing the OBR to revise down projected revenues in future.

Added to this is a structural effect of rapidly rising incorporation and self-employment, which further erodes revenues.

That bit made me shudder. We have already had the dividend tax. VFRS now getting hit, I wouldn't be surprised to see what is happening in the public sector get pushed out to the private sector. 2019? Possibly. December 5th, can't wait :suicide:

jamesbrown
23rd November 2016, 21:05
Nope there is Spring Budget 2017, Autumn Budget 2017, Spring Statement 2018, Autumn Budget 2018.

The change will require another consultation document (albeit its probably a done deal already) and the earliest that could come out would be Autumn 2017. Personally I think they would wait a whole year so Consultation (which can be launched at any time provided people are notified) in Spring 2018, sign off Autumn 2018, live 5/4/19...

Ah yes, I see there is a Spring Budget 2017 (the last one). Still, too soon.

SueEllen
23rd November 2016, 21:47
Not sure where you got that impression. I think it is going to be an unmitigated disaster with public sector bodies having to spend additional time and money resourcing much needed projects. It's at best wooden dollars, and worst putting public services in severe jeopardy when the big 4 get hired to plug the gaps compliantly at twice the price.



There is an elephant in the room - the big 4 also use contractors.

They like smaller consultancies simply don't have the expertise to fulfill all their government contracts particularly those in the back of beyond.

I've had them try to recruit me both for contracts and permie roles in the last 5 years.

SussexSeagull
23rd November 2016, 21:48
I suspect in 5-10 years when all the court cases have gone through about people being categorised as employees wanting employee benefits like holiday contracting will end to be replaced by relatively well paid FTC.

eek
23rd November 2016, 21:52
There is an elephant in the room - the big 4 also use contractors.

They like smaller consultancies simply don't have the expertise to fulfill all their government contracts particularly those in the back of beyond.

I've had them try to recruit me both for contracts and permie roles in the last 5 years.

Go back and look at example 3 (I think) in the consultation document. Were they to provide you to a public sector agency / department they would be fully in their rights to say sorry this contract is inside IR35 - We can however offer you this nice permie job which will allow you to claim expenses....

Andy Hallett
23rd November 2016, 22:13
I wrote this a few weeks ago and updated it today when some of the detail came through.

https://www.linkedin.com/pulse/new-off-payroll-rules-wolf-real-andy-hallett?_mSplash=1&trk=prof-post

eek
23rd November 2016, 22:29
I wrote this a few weeks ago and updated it today when some of the detail came through.

https://www.linkedin.com/pulse/new-off-payroll-rules-wolf-real-andy-hallett?_mSplash=1&trk=prof-post

Just responded to Lucy's umbrella comment regarding the real issue - expenses. Looks like I'm no longer working down in that London town...

eek
23rd November 2016, 22:33
I have said this enough times already, they want everyone to pay their fair share" of taxes. From the AS today, I think it's been posted somewhere already on the forum:



That bit made me shudder. We have already had the dividend tax. VFRS now getting hit, I wouldn't be surprised to see what is happening in the public sector get pushed out to the private sector. 2019? Possibly. December 5th, can't wait :suicide:

They need to battle employment, self employment and the gig economy in such a way that tax will still be collectable. They haven't done so in 40 years so they aren't going to do so now and unless they do it now its too late...

Either way it the Uber tribunal gives me more cause for hope than I otherwise would have had today.

northernladuk
23rd November 2016, 22:33
I'm struggling with that 36% figure. On the face of it that seems incredibly low. Thinking about it more I just can't get my head around it. Does that include the large majority of people that are sitting the completely oblivious to all this or was the audience generally in the know. Was it a good cross section so the other 64% are the ones that haven't a clue? Does it include the people that plan to or have already bailed before it hits etc. The number doesnt mean anything to me.

Or most likely... Have I got it all wrong?

SueEllen
23rd November 2016, 22:36
Go back and look at example 3 (I think) in the consultation document. Were they to provide you to a public sector agency / department they would be fully in their rights to say sorry this contract is inside IR35 - We can however offer you this nice permie job which will allow you to claim expenses....

They have been offering the same roles as permie and contract roles but haven't been able to fill them, so just being able to offer them as permie roles leaves them with a bigger problem.

eek
23rd November 2016, 22:42
They have been offering the same roles as permie and contract roles but haven't been able to fill them, so just being able to offer them as permie roles leaves them with a bigger problem.

That's a problem then as based on the documentation we currently have those roles are inside IR35...

Antman
24th November 2016, 09:39
I'm struggling with that 36% figure. On the face of it that seems incredibly low. Thinking about it more I just can't get my head around it. Does that include the large majority of people that are sitting the completely oblivious to all this or was the audience generally in the know. Was it a good cross section so the other 64% are the ones that haven't a clue? Does it include the people that plan to or have already bailed before it hits etc. The number doesnt mean anything to me.

Or most likely... Have I got it all wrong?

Where I'm going back to next week, most have not a clue about this. The general attitude when I mentioned it previously was "naah, never going to happen" :ind

I'd say 36% was on the high side!

CDJ
24th November 2016, 10:22
They need to battle employment, self employment and the gig economy in such a way that tax will still be collectable. They haven't done so in 40 years so they aren't going to do so now and unless they do it now its too late...

Either way it the Uber tribunal gives me more cause for hope than I otherwise would have had today.

Interesting point re the Uber ruling - its all well and good the agency or PS department not wanting to take the risk with compliance and declaring everyone IR35.. but then if they are not bang on with the contracts, are they not just opening the door to a lot of employment tribunal cases??

Gordon Ice
24th November 2016, 22:58
Ok, not afraid to admit that I'm slightly perplexed as to why this is turning into such a big deal..

At it's most basic we're dealing with a RISK and it's the same risk that has existed since the beginning of IR35 - that a contractor will be found to be inside IR35 and additional liabilities, penalities & interest will be due. The only difference now is that the RISK OWNER has changed. As with all business risks a suitable mitigation is required and my proposal is as follows:

1. Agency & Contractor agree that the role is outside IR35, produce an "IR35 friendly" contract (i.e. contains all the classical MOO, Substitution, Control clauses) and insert additional clauses whereby the contractor agrees to indemnify the Agency for all losses in the event that an "inside IR35" verdict is later given.
2. Contractor obtains a professional contract review confirming an "outside IR35" position (recognising that working practice judgements will be based on "intended" practices where this is prior to the contract start).
3. Contractor takes out an insurance policy to cover the liabilities should they be found inside IR35 (correct me if I'm wrong but don't these already exist? - Qdos (https://www.qdoscontractor.com/ir35/ir35-insurance)?)
4. Agency, Contractor & Client agree to review the working practices (e.g. after 3 months - and let's face it, it's in no-one's interests to enact an employer/employee relationship) to confirm that the contract isn't a sham.
5. Keep calm and carry on; oh, and stick two fingers up at the imbeciles who profess to be competent at running this country (you know who you are) :smokin

So why would everyone go along with this? Well..
- Contractor = No real change and still making a decent living
- Client = Can still attract contractors without blowing the budget
- Agent = Still in business
- Insurance Industry = Profit
- IPSE = Membership sales
- HMRC = No choice in the matter, still not enough resources to administer IR35, and will still lose over 90% of cases that go to court since the IR35 legislation isn't changing

So what am I missing?

jamesbrown
24th November 2016, 23:08
So what am I missing?

Quite a lot. To begin with, your indemnity clause is worth feck all to an agent or client as YourCo will fold at will, and no agency is going to expose itself to an indefinite loss. Also, there's joint and several liability, so HMG can pursue anyone in the chain, in any order. You can imagine who they'll start with. The agent is in business either way. Why would they both with this faff versus requiring you to operate inside IR35 or, better still, through an affiliated umbrella? Granted, this creates a problem for recruitment within the PS while the responsibility and liability remains unchanged in the private sector, but they'll correct that imbalance eventually.

northernladuk
24th November 2016, 23:12
And why would and agency takenon the risk and liabilities of something it has no control over?

Gordon Ice
24th November 2016, 23:20
Quite a lot. To begin with, your indemnity clause is worth feck all to an agent or client as YourCo will fold at will, and no agency is going to expose itself to an indefinite loss. Also, there's joint and several liability, so HMG can pursue anyone in the chain, in any order. You can imagine who they'll start with. The agent is in business either way. Why would they both with this faff versus requiring you to operate inside IR35 or, better still, through an affiliated umbrella? Granted, this creates a problem for recruitment within the PS while the responsibility and liability remains unchanged in the private sector, but they'll correct that imbalance eventually.

So I guess everyone is royally shafted then until contractors work out how to consistently get a pass from the vapourware that is the IR35 Online Tool, and the first cases pass through court.

jamesbrown
24th November 2016, 23:50
So I guess everyone is royally shafted then until contractors work out how to consistently get a pass from the vapourware that is the IR35 Online Tool, and the first cases pass through court.

The online tool is a red herring, I'm afraid. Unless the agent/client really wants a specialist resource and are prepared to formulate it within an appropriate framework, and take all associated risks of being wrong, they won't even bother with the online tool. Remember, there are two upfront questions before you get to that stage (one about personal service and one about control, with MoO being conveniently forgotten). Unless there is an absence of either personal service or control (or both), the online tool isn't used. In that sense, the content of the online tool is pretty irrelevant. All they need is the illusion of utility w/r to the online tool (i.e. spin).

Gordon Ice
25th November 2016, 00:16
The online tool is a red herring, I'm afraid. Unless the agent/client really wants a specialist resource and are prepared to formulate it within an appropriate framework, and take all associated risks of being wrong, they won't even bother with the online tool. Remember, there are two upfront questions before you get to that stage (one about personal service and one about control, with MoO being conveniently forgotten). Unless there is an absence of either personal service or control (or both), the online tool isn't used. In that sense, the content of the online tool is pretty irrelevant. All they need is the illusion of utility w/r to the online tool (i.e. spin).

Hmm.. not sure. Last I looked the legal system was independent of Agencies/Clients so if we chose to contest an "inside IR35" position we have the legal right to do so. Obviously this could result in the Agency/Client saying "inside IR35" whilst at the same time a court agreeing with an "outside IR35" position. Then what? A mess is what.

Also, I thought HMRC had stated that they would stand by the Online Tool result which would remove all liability from all parties; so why would the Client/Agency even want to ignore this?

Too many unknowns I guess so I'll keep my powder dry until we know the details. Thanks for your thoughts.

jamesbrown
25th November 2016, 01:31
Hmm.. not sure. Last I looked the legal system was independent of Agencies/Clients so if we chose to contest an "inside IR35" position we have the legal right to do so. Obviously this could result in the Agency/Client saying "inside IR35" whilst at the same time a court agreeing with an "outside IR35" position. Then what? A mess is what.

Also, I thought HMRC had stated that they would stand by the Online Tool result which would remove all liability from all parties; so why would the Client/Agency even want to ignore this?

Too many unknowns I guess so I'll keep my powder dry until we know the details. Thanks for your thoughts.

Sure, there's a right of appeal but, again, you're going to be fighting a losing battle unless the client is onside. I don't fancy your chances when the client is saying that SDC and personal service are mandatory. Also, why would you stick around, being paid net of all PAYE/NIC taxes, on the offchance that your appeal is successful? The appeal could take months (years?).

Again, the online tool is irrelevant unless, fundamentally, the client/agent are willing to take the risk of assessing the situation incorrectly. If they are willing to take the risk, you're probably fine. Certainly, an agent won't be willing, because they have none of the information necessary to make the assessment properly.

youngguy
25th November 2016, 09:35
unless the client is onside. .

In my experience ps ppl go with the easiest. I was once in A situation where I was below rate and the rules stated you could not have an increase.They wanted to keep me and recognised that if i left my replacement would cost MORE than giving me an increase.

But rules were rules and no one was gonna put their head above.

I can't see any dept head saying they will take the risk. Delivery and success is second to fear of being accountable for a decision in Gov. If they follow process no one moans...even if the process is flawed

sal
25th November 2016, 10:20
I can't see any dept head saying they will take the risk. Delivery and success is second to fear of being accountable for a decision in Gov. If they follow process no one moans...even if the process is flawed

This, unfortunately...

MPwannadecentincome
25th November 2016, 12:20
Bench periods will get harder with PAYE deductions too - you can get personal tax back as that evens out over the year, the employer/employee NI once deducted cannot be reclaimed. Will be time to claim that ~£70 per week.

b r
26th November 2016, 17:57
Will be time to claim that ~£70 per week.

I had exactly the same thought, if we're now PAYE then we'll need to act as a PAYE.

Whorty
27th November 2016, 15:07
Below is directly off the gov.co.uk website (https://www.gov.uk/guidance/ir35-find-out-if-it-applies). Seems based on these rules we are all already inside IR35 ... i.e. we all work through an intermediary (our own limited company). So, taking this on face value, aren't we all already compliant? My ltd pays me a salary and I pay tax and NI on this. My company also pays employers NI to the legal value based on the salary I take. Each year I take a divi from the company and this is taxed as legally required. The fact that my company does not pay me the full amount it takes from the client each year is irrelevant to the IR35 rule as written below ... it only talks about my 'salary' not my company's 'revenue'.

I know this isn't what the AS has suggested will happen, but reading the below which is a direct quote off the gov website aren't we all OK? This was last updated Aug 2016. Clearly more to it than just this ... but on face value ...!

Uber is a different kettle of fish - it becomes the intermediary and it is liable for the PAYE, NI etc for the drivers so their situation changes completely.

Maybe to limit agency risk they will no longer take a % of day rate but take an introducers fee up from from the end client ... and we invoice client directly. There would then be no other intermediary and it is a clear relationship between myco and the end client. Just then need to prove that there is no SDC and the contract has been reviewed and compliant.


"Who’s affected by IR35
IR35 is also known as ‘intermediaries legislation’. It’s a set of rules that affect your tax and National Insurance if you’re contracted to work for a client through an intermediary. You may need to follow IR35 if you work for a client through an intermediary.

The intermediary can be:

your own limited company
a service or personal service company
a partnership

If IR35 applies then the intermediary has to operate PAYE and National Insurance contributions on any salary or wages it pays to you during the tax year.

The rules are designed to make sure that the right rate of tax and National Insurance is paid for you.

IR35 may also apply if you’re working through an intermediary and you:

or your intermediary, or client are abroad
work in the construction industry
are an office-holder
work with your partner or spouse
are working, through an intermediary, for a charitable organisation
IR35 doesn’t apply if you work for a client through a Managed Service Company (MSC) or agency, for example an employment agency."

SueEllen
27th November 2016, 15:27
Below is directly off the gov.co.uk website (https://www.gov.uk/guidance/ir35-find-out-if-it-applies). Seems based on these rules we are all already inside IR35 ... i.e. we all work through an intermediary (our own limited company). So, taking this on face value, aren't we all already compliant? My ltd pays me a salary and I pay tax and NI on this. My company also pays employers NI to the legal value based on the salary I take. Each year I take a divi from the company and this is taxed as legally required. The fact that my company does not pay me the full amount it takes from the client each year is irrelevant to the IR35 rule as written below ... it only talks about my 'salary' not my company's 'revenue'.

I know this isn't what the AS has suggested will happen, but reading the below which is a direct quote off the gov website aren't we all OK? This was last updated Aug 2016. Clearly more to it than just this ... but on face value ...!

Uber is a different kettle of fish - it becomes the intermediary and it is liable for the PAYE, NI etc for the drivers so their situation changes completely.

Maybe to limit agency risk they will no longer take a % of day rate but take an introducers fee up from from the end client ... and we invoice client directly. There would then be no other intermediary and it is a clear relationship between myco and the end client. Just then need to prove that there is no SDC and the contract has been reviewed and compliant.


"Who’s affected by IR35
IR35 is also known as ‘intermediaries legislation’. It’s a set of rules that affect your tax and National Insurance if you’re contracted to work for a client through an intermediary. You may need to follow IR35 if you work for a client through an intermediary.

The intermediary can be:

your own limited company
a service or personal service company
a partnership

If IR35 applies then the intermediary has to operate PAYE and National Insurance contributions on any salary or wages it pays to you during the tax year.

The rules are designed to make sure that the right rate of tax and National Insurance is paid for you.

IR35 may also apply if you’re working through an intermediary and you:

or your intermediary, or client are abroad
work in the construction industry
are an office-holder
work with your partner or spouse
are working, through an intermediary, for a charitable organisation
IR35 doesn’t apply if you work for a client through a Managed Service Company (MSC) or agency, for example an employment agency."

Some agencies do this already.

Whorty
27th November 2016, 19:40
Some agencies do this already.

Interesting - I've never come across that before.

DaveB
27th November 2016, 19:40
Below is directly off the gov.co.uk website (https://www.gov.uk/guidance/ir35-find-out-if-it-applies). Seems based on these rules we are all already inside IR35 ... i.e. we all work through an intermediary (our own limited company). So, taking this on face value, aren't we all already compliant? My ltd pays me a salary and I pay tax and NI on this. My company also pays employers NI to the legal value based on the salary I take. Each year I take a divi from the company and this is taxed as legally required. The fact that my company does not pay me the full amount it takes from the client each year is irrelevant to the IR35 rule as written below ... it only talks about my 'salary' not my company's 'revenue'.

I know this isn't what the AS has suggested will happen, but reading the below which is a direct quote off the gov website aren't we all OK? This was last updated Aug 2016. Clearly more to it than just this ... but on face value ...!

Uber is a different kettle of fish - it becomes the intermediary and it is liable for the PAYE, NI etc for the drivers so their situation changes completely.

Maybe to limit agency risk they will no longer take a % of day rate but take an introducers fee up from from the end client ... and we invoice client directly. There would then be no other intermediary and it is a clear relationship between myco and the end client. Just then need to prove that there is no SDC and the contract has been reviewed and compliant.


"Who’s affected by IR35
IR35 is also known as ‘intermediaries legislation’. It’s a set of rules that affect your tax and National Insurance if you’re contracted to work for a client through an intermediary. You may need to follow IR35 if you work for a client through an intermediary.

The intermediary can be:

your own limited company
a service or personal service company
a partnership

If IR35 applies then the intermediary has to operate PAYE and National Insurance contributions on any salary or wages it pays to you during the tax year.

The rules are designed to make sure that the right rate of tax and National Insurance is paid for you.

IR35 may also apply if you’re working through an intermediary and you:

or your intermediary, or client are abroad
work in the construction industry
are an office-holder
work with your partner or spouse
are working, through an intermediary, for a charitable organisation
IR35 doesn’t apply if you work for a client through a Managed Service Company (MSC) or agency, for example an employment agency."

What you are missing there is that under IR35 any payments made to your co are treated as "Deemed payments" and should be taxed as personal income under PAYE by your co before paying anything to you.


When IR35 applies, the earnings of your intermediary (your personal service company, limited company or partnership) for that engagement are deemed to be the income of the worker. This is called the deemed employment payment.
https://www.gov.uk/guidance/ir35-what-to-do-if-it-applies

SueEllen
27th November 2016, 21:45
Interesting - I've never come across that before.

The first agency who told me about it 6 years back said it was how they operated in Germany. However I turned down that contract as the client refused to remove my name from it as one of the parties. Since then I've had a contract like that in the UK and have been offered some others.

Clients in the UK do it so they know exactly how much they are paying and can ensure you get the money. However you generally get paid slower than through the agency.