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eek
19th January 2017, 22:30
Deleted - nothing to worry about Semtex / teapot418

eek
19th January 2017, 22:40
Deleted - nothing to worry about Semtex / teapot418

eek
19th January 2017, 22:41
Deleted - nothing to worry about Semtex / teapot418

eek
19th January 2017, 22:41
Deleted - nothing to worry about Semtex / teapot418

eek
19th January 2017, 22:41
Deleted - nothing to worry about Semtex / teapot418

eek
19th January 2017, 22:42
Retrospective Claims

Deleted as i made it all up according to teapot418

eek
19th January 2017, 22:42
Deleted - nothing to worry about Semtex / teapot418

eek
19th January 2017, 22:42
Reserved 2 (text here is now in the first post).

eek
19th January 2017, 22:44
Reserved spare 3

eek
20th January 2017, 07:47
Reserved Spare 4

b r
20th January 2017, 09:37
Employees NI and income tax will be withheld from the payment and the agency will forward that to HMRC on your behalf.

Income tax assessed on a week/month 1 basis - therefore 40% for the majority from Invoice 1?

Andy Hallett
20th January 2017, 11:05
Employees NI and income tax will be withheld from the payment and the agency will forward that to HMRC on your behalf.

Income tax assessed on a week/month 1 basis - therefore 40% for the majority from Invoice 1?

Income Tax based on the workers tax code as I understand.

eek
20th January 2017, 11:06
Income Tax based on the workers tax code as I understand.

only if proved to the agency I guess.

b r
20th January 2017, 11:13
Income Tax based on the workers tax code as I understand.

How will anyone know if you're on two contracts or not, until invoices are processed maybe I suppose with RTI?

DaveB
20th January 2017, 11:21
Income Tax based on the workers tax code as I understand.

How will anyone know if you're on two contracts or not, until invoices are processed maybe I suppose with RTI?

Not relevant if it's based on tax code. You'll be taxed under PAYE + Employers NI for a PS gigs based on your Tax Code, paid via your Ltd in the normal way for non-PS gigs and will have to declare and pay as appropriate on your SATR.

If you can live on the "salary" from your PS gig then the best bet would be to just leave the non-PS income in the company warchest, or use it to make pension contributions.

If you have sufficient income to live on from the non-PS gig, or a warchest sufficient to see you though the contract, you could put all the PS salary into a pension, claim tax relief on the contributions via your SATR to reduce your taxable income to £0 and pay divi's out of the company at 7% up to the lower tax limit to live on.

Agent
20th January 2017, 11:35
Does anyone have any understanding on how liability is passed up the chain?

i.e We supply a contractor to a consultancy (e.g. CSC), they then put someone onsite at the NHS.

Does the buck stop with CSC or the agency that supplied to CSC?

eek
20th January 2017, 11:35
Not relevant if it's based on tax code. You'll be taxed under PAYE + Employers NI for a PS gigs based on your Tax Code, paid via your Ltd in the normal way for non-PS gigs and will have to declare and pay as appropriate on your SATR.

If you can live on the "salary" from your PS gig then the best bet would be to just leave the non-PS income in the company warchest, or use it to make pension contributions.

If you have sufficient income to live on from the non-PS gig, or a warchest sufficient to see you though the contract, you could put all the PS salary into a pension, claim tax relief on the contributions via your SATR to reduce your taxable income to £0 and pay divi's out of the company at 7% up to the lower tax limit to live on.

Salary sacrifice via an umbrella would get that down to £20 a week... Pensions are really awkward here so I don't want great detail...

eek
20th January 2017, 13:36
Does anyone have any understanding on how liability is passed up the chain?

i.e We supply a contractor to a consultancy (e.g. CSC), they then put someone onsite at the NHS.

Does the buck stop with CSC or the agency that supplied to CSC?

don't take this the wrong way but I don't know and being that its agency related rather than contractor related I'm not that concerned.

Hopefully Andy Hallett will pick up the question and answer it.

Andy Hallett
20th January 2017, 14:07
Does anyone have any understanding on how liability is passed up the chain?

i.e We supply a contractor to a consultancy (e.g. CSC), they then put someone onsite at the NHS.

Does the buck stop with CSC or the agency that supplied to CSC?

The liability for duducting is with the payer. In the chain you descibe, that is the agency.

The liability for determination is with the Public Sector client.

Agent
20th January 2017, 15:21
The liability for duducting is with the payer. In the chain you descibe, that is the agency.

The liability for determination is with the Public Sector client.

The contractor will be paid by the consultancy (CSC in example), we then pay CSC in turn.

Agent
20th January 2017, 15:22
don't take this the wrong way but I don't know and being that its agency related rather than contractor related I'm not that concerned.

Hopefully Andy Hallett will pick up the question and answer it.

It's all one and the same thing isn't it? What effects the agencies effects you? (assuming you'll ever work through an agency)

BackupBoy
21st January 2017, 09:17
Hmmm. This just in from the programme director at my current contract (MoD via consultancy via agency):

"Some of you have started to raise concerns around the proposed revision to IR35 for Public Sector contractors in April this year.

At this point we do not have firm information but I wanted to let you know that it is on our radar and we are in discussion with <agency> and <consultancy>on this matter."

I will update you further once more information is available but meanwhile, if you have any concerns, please come and talk to either myself or <programme manager>."

My current extension is up on May 19th and for most of the other contractors it's around the same time. Current extensions are all 3 or 4 months duration.

Doesn't bode well.

eek
21st January 2017, 09:22
Hmmm. This just in from the programme director at my current contract (MoD via consultancy via agency):

"Some of you have started to raise concerns around the proposed revision to IR35 for Public Sector contractors in April this year.

At this point we do not have firm information but I wanted to let you know that it is on our radar and we are in discussion with <agency> and <consultancy>on this matter."

I will update you further once more information is available but meanwhile, if you have any concerns, please come and talk to either myself or <programme manager>."

My current extension is up on May 19th and for most of the other contractors it's around the same time. Current extensions are all 3 or 4 months duration.

Doesn't bode well.

Who does the programme director work for?

How long have you been there for? How much would the payment be if everything was inside?

NHS1979
21st January 2017, 10:17
This is the most helpful thread I've found on all of this so, firstly, thank you for all your time spent giving info.

I am an NHS Manager normally working as a contractor/interim with the NHS via an agency (so my contract is with the agency, who in turn have one with the NHS). At present this works well and I move around depending on where the work is. Typical day rate would be £450 and, leaving aside the VAT, I get this into the company account, leave aside the Corporation Tax, and pay myself minimum salary and rest in dividends (with the latter also taxed after a threshold).

My NHS end-client is, as you'd expect, bemused by all this and no doubt will employ a blanket decision like TfL.

I know you are going to post more information, but for now my only question is re corporation tax. If I carry on post-March '17 with a new contract with slicker wording from the agency, my understanding is that NI and PAYE taxes are collected and I receive the net of this into the company account. This would now be regarded as 'salary' and so payable directly into my personal bank account (no more dividends or dividend taxes). But what about the corporation tax? If I am still getting this 'salary' via the ltd company, will the CT still be due too? 20% is massive. :eek:

runandbecome
21st January 2017, 10:25
More confusion

A number of us at the university I am doing I.T consultancy for are billing directly.
I noticed in the threads. HMRC may make PAYE a yearly guess like normal employees get (i.e the if you bill per month or week they work out your yearly rate)
However most of us are billing sporadically per work. for me I have a different projects I'm assigned I may put in invoices at very sporadic times maybe 6weeks then 4weeks then 7 weeks. Also we have no contract which makes life even more interesting.

So far we have heard nothing from the University I'm at.

BackupBoy
21st January 2017, 11:46
Who does the programme director work for?

How long have you been there for? How much would the payment be if everything was inside?


The consultancy.

Since May 2016. Initial 6 month contract extended in November for a further 6.

I'll need to work out those numbers properly but a quick and dirty umbrella company calc produces around £6k net.

It's a 400 mile round trip weekly commute and I rent a room in a shared house locally.

SueEllen
21st January 2017, 11:56
It's all one and the same thing isn't it? What effects the agencies effects you? (assuming you'll ever work through an agency)

Not necessarily.

SueEllen
21st January 2017, 11:58
More confusion

A number of us at the university I am doing I.T consultancy for are billing directly.
I noticed in the threads. HMRC may make PAYE a yearly guess like normal employees get (i.e the if you bill per month or week they work out your yearly rate)
However most of us are billing sporadically per work. for me I have a different projects I'm assigned I may put in invoices at very sporadic times maybe 6weeks then 4weeks then 7 weeks. Also we have no contract which makes life even more interesting.

So far we have heard nothing from the University I'm at.

Are you using purchase orders? So you basically bill per piece of work/milestone you have done.

Andy Hallett
21st January 2017, 12:29
More confusion

A number of us at the university I am doing I.T consultancy for are billing directly.
I noticed in the threads. HMRC may make PAYE a yearly guess like normal employees get (i.e the if you bill per month or week they work out your yearly rate)
However most of us are billing sporadically per work. for me I have a different projects I'm assigned I may put in invoices at very sporadic times maybe 6weeks then 4weeks then 7 weeks. Also we have no contract which makes life even more interesting.

So far we have heard nothing from the University I'm at.

The onus is on the University to declare you inside IR35. Until they do (or don't) I would hang tight.

runandbecome
21st January 2017, 15:55
Are you using purchase orders? So you basically bill per piece of work/milestone you have done.

Yes we do get po's my manager raises PO's for us, which grants us 6 months contracts, so unfortunately not for specific work, but we are encouraged to invoice against certain projects.
We have to put the PO number on our invoices.

Some of us are billing directly some are going through agencies.
I gather either the University will blanket everyone whether direct or not, or we may get lucky.

So weird with Universities as well, I know they are officially public but in the finer detail they are not really public and are run like normal co's.

SueEllen
21st January 2017, 16:54
Yes we do get po's my manager raises PO's for us, which grants us 6 months contracts, so unfortunately not for specific work, but we are encouraged to invoice against certain projects.
We have to put the PO number on our invoices.

Some of us are billing directly some are going through agencies.
I gather either the University will blanket everyone whether direct or not, or we may get lucky.

So weird with Universities as well, I know they are officially public but in the finer detail they are not really public and are run like normal co's.

Unfortunately as each PO isn't against an individual project but in fact a contract then you are stuck in the same boat as those going by agencies. The examples given in the information released so far make it clear if each piece of work is single and discrete then you would be outside the new regulations.

teapot418
21st January 2017, 18:13
[
Pensions

If you are contributing large amounts into a pension your pension contributions will be from your post salary income not direct from your company. That means that all contributions are going to be 15-25% smaller due to National Insurance being deducted prior to it being paid into your pension. If you pay a lot into a pension you need to seriously decide on whether it would be better to use an umbrella company and pay into your pension using Salary Sacrifice.

You will also have to use self assessment to reclaim the higher rate income tax proportion of any pension contributions see https://www.aegon.co.uk/support/faq/pension-technical/claiming-tax-relief-pp-faq.html for some details



Probably should point out that the treatment of pension contributions is a best guess at this stage.

b r
21st January 2017, 18:22
This came out of my OH's agency in response to another contractors questions:

The proposed legislation is still at the consultation stage so until we receive formal guidance we are unable to advise. You will not be the only contractor in this position in regards to payment for March work come April. <note: they won't bring forward the payment date from the 10th April>

Until x have confirmed and <agency> has stated their stance I cannot make these amendments. We will amend appropriately once confirmation has been received but we are unable to make the amendment right now

The client will receive communication from ourselves in relation to IR35 changes and the outcome for their contractors.

I appreciate your concern but we will do all we can to ensure your needs are suitable met after the consultation period.


So basically the 9 contactors (all from the same agency) are handing in their notice a month early (contracts run to end March) to ensure they don't get caught with a post 6th April payment.

Agency (and one of the largest in the UK) seems to:
a: have no plan
b: leaving it to each local office

Unreal.

DaveB
21st January 2017, 18:30
This is the most helpful thread I've found on all of this so, firstly, thank you for all your time spent giving info.

I am an NHS Manager normally working as a contractor/interim with the NHS via an agency (so my contract is with the agency, who in turn have one with the NHS). At present this works well and I move around depending on where the work is. Typical day rate would be £450 and, leaving aside the VAT, I get this into the company account, leave aside the Corporation Tax, and pay myself minimum salary and rest in dividends (with the latter also taxed after a threshold).

My NHS end-client is, as you'd expect, bemused by all this and no doubt will employ a blanket decision like TfL.

I know you are going to post more information, but for now my only question is re corporation tax. If I carry on post-March '17 with a new contract with slicker wording from the agency, my understanding is that NI and PAYE taxes are collected and I receive the net of this into the company account. This would now be regarded as 'salary' and so payable directly into my personal bank account (no more dividends or dividend taxes). But what about the corporation tax? If I am still getting this 'salary' via the ltd company, will the CT still be due too? 20% is massive. :eek:

No, your (strictly your ltd co.'s) CT bill will be £0 (assuming the company has no other form of income). CT is charged on profits after costs. Salary is a cost and is deducted from profits before CT is calculated. Since the entire income to the company is paid out in salary there are no profits to be taxed and no CT to pay.

runandbecome
21st January 2017, 18:41
No, you're CT bill will be £0 (assuming the company has no other form of income). CT is charged on profits after costs. Salary is a cost and is deducted from profits before CT is calculated. Since the entire income to the company is paid out in salary there are no profits to be taxed and no CT to pay.

This is what I was trying to work out.
For some of us zero corp tax could be not too bad compared to the current situation.
For people like me who don't travel too much, I spend a bit on eqpt.

I am trying to find somewhere where I can make calculations as to what I may recieve if the new rules apply.

Currently £360 a day

Take home between me and wife with Salary Dividends is about £5500

My Corp tax bill last year was about £15k so I am trying to calculate difference.

Then the other question is what becomes of the company, do you stop billing through that and just get an umbrella?

cojak
21st January 2017, 19:23
This is what I was trying to work out.
For some of us zero corp tax could be not too bad compared to the current situation.
For people like me who don't travel too much, I spend a bit on eqpt.

I am trying to find somewhere where I can make calculations as to what I may recieve if the new rules apply.

Currently £360 a day

Take home between me and wife with Salary Dividends is about £5500

My Corp tax bill last year was about £15k so I am trying to calculate difference.

Then the other question is what becomes of the company, do you stop billing through that and just get an umbrella?

Use this to calculate: Umbrella Calculator (http://www.contractorumbrella.com/calculator.html)

eek
21st January 2017, 20:03
Probably should point out that the treatment of pension contributions is a best guess at this stage.

Not really. The best option for pensions is salary sacrifice and you can't do that if the agency is paying employers NI unless they are willing to pay directly into your pension instead.

Now if a financial advisor is willing to give me advice that differs from the advice I've already received I'm happy to change it but until then I will leave it as it is

Andy Hallett
21st January 2017, 20:24
This came out of my OH's agency in response to another contractors questions:

The proposed legislation is still at the consultation stage so until we receive formal guidance we are unable to advise. You will not be the only contractor in this position in regards to payment for March work come April. <note: they won't bring forward the payment date from the 10th April>

Until x have confirmed and <agency> has stated their stance I cannot make these amendments. We will amend appropriately once confirmation has been received but we are unable to make the amendment right now

The client will receive communication from ourselves in relation to IR35 changes and the outcome for their contractors.

I appreciate your concern but we will do all we can to ensure your needs are suitable met after the consultation period.


So basically the 9 contactors (all from the same agency) are handing in their notice a month early (contracts run to end March) to ensure they don't get caught with a post 6th April payment.

Agency (and one of the largest in the UK) seems to:
a: have no plan
b: leaving it to each local office

Unreal.

To be fair there will be differing levels of knowledge at all agencies and end clients. Consultants won't always know the detail

This close to the event though, the amount of pennies that haven't dropped across clients, agencies and contractors is simply stunning.

We are committed to supporting PSC's both inside of IR35 and those who are genuinely able to operate outside. We've had quite a proactive approach to this change and have picked up more business than we've lost from contractors and clients, simply because we have a reasonable understanding and are not sticking our heads in the sand.

runandbecome
21st January 2017, 21:38
To be fair there will be differing levels of knowledge at all agencies and end clients. Consultants won't always know the detail

This close to the event though, the amount of pennies that haven't dropped across clients, agencies and contractors is simply stunning.

We are committed to supporting PSC's both inside of IR35 and those who are genuinely able to operate outside. We've had quite a proactive approach to this change and have picked up more business than we've lost from contractors and clients, simply because we have a reasonable understanding and are not sticking our heads in the sand.

Yes I too am amazed at how few are aware of this change. In the University I have mentioned, not one other contractor is discussing it, those that I point to these forums are pretty nonchalant.
By the calculation if I am forced to go umbrella I'll be around £1200 worse off a month.
I think the wife and I may then classify in Theresa Mays JAM category.
Glad you are keeping abreast of this Andy I think you and your agency may be one of the very few that will be able to give decent advice as many others are ignoring the situation.

NHS1979
21st January 2017, 22:10
No, your (strictly your ltd co.'s) CT bill will be £0 (assuming the company has no other form of income). CT is charged on profits after costs. Salary is a cost and is deducted from profits before CT is calculated. Since the entire income to the company is paid out in salary there are no profits to be taxed and no CT to pay.

Thanks that's very helpful. It's hard to even get my accountant to understand my dilemma - he thinks I can just forget the public sector, but that really is my specialism so I just need to find the least damaging solution post-March. Noone seems able to tell me how much worse off I will be than my current situation - my own calculations seem to differ from the contractor umbrella, mainly because I am too stupid to know what % tax I would pay! But it looks like a 39% drop if I switched to the NHS payroll, a 28% drop if I stay as is via an agency but under IR35, and a 26% drop if I switch to an umbrella company. Grim, but I'm lucky I don't travel much so no expenses.

cojak
22nd January 2017, 09:22
Thanks that's very helpful. It's hard to even get my accountant to understand my dilemma - he thinks I can just forget the public sector, but that really is my specialism so I just need to find the least damaging solution post-March. Noone seems able to tell me how much worse off I will be than my current situation - my own calculations seem to differ from the contractor umbrella, mainly because I am too stupid to know what % tax I would pay! But it looks like a 39% drop if I switched to the NHS payroll, a 28% drop if I stay as is via an agency but under IR35, and a 26% drop if I switch to an umbrella company. Grim, but I'm lucky I don't travel much so no expenses.

Also consider the (possibly) very least damaging solution of leaving your current contract and find a new one for 5th April.

SueEllen
22nd January 2017, 11:18
Thanks that's very helpful. It's hard to even get my accountant to understand my dilemma - he thinks I can just forget the public sector, but that really is my specialism so I just need to find the least damaging solution post-March. Noone seems able to tell me how much worse off I will be than my current situation - my own calculations seem to differ from the contractor umbrella, mainly because I am too stupid to know what % tax I would pay! But it looks like a 39% drop if I switched to the NHS payroll, a 28% drop if I stay as is via an agency but under IR35, and a 26% drop if I switch to an umbrella company. Grim, but I'm lucky I don't travel much so no expenses.

The least damaging one for you is to find a different PS contract before April 5.

If HMRC decides to dig into your affairs you should then if you have insurance allow the insurer to point out the contract is completely different and not a continuation of a pre-April one.

b r
22nd January 2017, 17:38
But it looks like a 39% drop if I switched to the NHS payroll, a 28% drop if I stay as is via an agency but under IR35, and a 26% drop if I switch to an umbrella company. Grim, but I'm lucky I don't travel much so no expenses.

Which is why on another thread I predicted a serious lack of staff available at the NHS over the Easter weekend, when all those 'freelancers' will have realised the hit on income and will decide not to cover the bank holiday weekend when the family is off etc.

teapot418
22nd January 2017, 17:51
Not really. The best option for pensions is salary sacrifice and you can't do that if the agency is paying employers NI unless they are willing to pay directly into your pension instead.

Now if a financial advisor is willing to give me advice that differs from the advice I've already received I'm happy to change it but until then I will leave it as it is

A financial advisor is accountable for advice given, so it's unlikely they will put their neck on the line to say "this will happen" until the treatment of pension contributions has been confirmed.

I've no doubt the scenario you suggest is a likely outcome, but until it is confirmed it is a best guess.

eek
22nd January 2017, 18:09
A financial advisor is accountable for advice given, so it's unlikely they will put their neck on the line to say "this will happen" until the treatment of pension contributions has been confirmed.

I've no doubt the scenario you suggest is a likely outcome, but until it is confirmed it is a best guess.

It's actually a very simple question!!!

Given the choice of paying for a pension via personal payments (and reclaiming the tax back) or getting someone to pay the money (including all the employers NI that was saved) which is the better option?

all my calcuations tell me salary sacrifice is better - the financial advisors I have asked confirm that its better yet still people query it without any evidence to back up their statements...

eek
22nd January 2017, 18:10
But it looks like a 39% drop if I switched to the NHS payroll, a 28% drop if I stay as is via an agency but under IR35, and a 26% drop if I switch to an umbrella company. Grim, but I'm lucky I don't travel much so no expenses.

Which is why on another thread I predicted a serious lack of staff available at the NHS over the Easter weekend, when all those 'freelancers' will have realised the hit on income and will decide not to cover the bank holiday weekend when the family is off etc.

Aren't locum doctors / nurses / consultants already covered by IR35?

teapot418
22nd January 2017, 19:20
It's actually a very simple question!!!

Given the choice of paying for a pension via personal payments (and reclaiming the tax back) or getting someone to pay the money (including all the employers NI that was saved) which is the better option?

all my calcuations tell me salary sacrifice is better - the financial advisors I have asked confirm that its better yet still people query it without any evidence to back up their statements...

I wasn't looking for an argument :) Just suggesting that we don't present things as 'fact' until they're confirmed. It may still be possible, depending on the final legislation, to 'get back' NI deductions if operating via a limited company, although I agree with your assessment that it probably won't. But it is still an unknown.

eek
22nd January 2017, 20:32
I wasn't looking for an argument :) Just suggesting that we don't present things as 'fact' until they're confirmed. It may still be possible, depending on the final legislation, to 'get back' NI deductions if operating via a limited company, although I agree with your assessment that it probably won't. But it is still an unknown.

Which just goes to show that you don't understand how NI works - hint its not an annual payment but is based on what you earn that week..

And I'm not looking for an argument here but given I'm spending time triple checking stuff before posting it I would prefer people to correct things that need to be corrected by pointing me in the correct direction rather than going I don't think that's right without a link to evidence showing where I'm wrong...

ladymuck
22nd January 2017, 20:54
Am I right in thinking that "expenses" doesn't just mean those incurred in the performance of the contract but all expenses incurred by YourCo? If YourCo has no income but has expenses (accountant, insurances, mobile phone, broadband, stationery, etc. etc.) they too can't be set off against your fees so YourCo will have a net loss and could potentially reclaim CT, or offset the loss should a gig in the next financial year be private sector?

teapot418
22nd January 2017, 20:58
Which just goes to show that you don't understand how NI works - hint its not an annual payment but is based on what you earn that week..

And I'm not looking for an argument here but given I'm spending time triple checking stuff before posting it I would prefer people to correct things that need to be corrected by pointing me in the correct direction rather than going I don't think that's right without a link to evidence showing where I'm wrong...

I do understand how NI works.

There is no evidence. Could you point me at where HMRC have said NI contributions will not be allowed?

The problem is that there is no definitive answer at this point; just educated guesses which, in the most part will be right. My suggestion was that this should be made clear, as the people happening across this thread may well take the posts as 'gospel'. But I won't labour the point - I think the thread is helpful, and the pension situation you have described will likely be the end result, so I don't wish to detract from that.

teapot418
22nd January 2017, 21:03
Am I right in thinking that "expenses" doesn't just mean those incurred in the performance of the contract but all expenses incurred by YourCo? If YourCo has no income but has expenses (accountant, insurances, mobile phone, broadband, stationery, etc. etc.) they too can't be set off against your fees so YourCo will have a net loss and could potentially reclaim CT, or offset the loss should a gig in the next financial year be private sector?

My understanding is that your expenses would come out of your taxed income, in the same way as an employee who pays for an accountant would pay from taxed income. The 5% allowance has been removed.

eek
22nd January 2017, 21:24
I do understand how NI works.

There is no evidence. Could you point me at where HMRC have said NI contributions will not be allowed?

The problem is that there is no definitive answer at this point; just educated guesses which, in the most part will be right. My suggestion was that this should be made clear, as the people happening across this thread may well take the posts as 'gospel'. But I won't labour the point - I think the thread is helpful, and the pension situation you have described will likely be the end result, so I don't wish to detract from that.

What do you mean by NI contributions when it comes to personal pension payments?

And if things change I'll update the bits. But the pension section is so far me and 3 experts who have checked it against 2 people with unknown backgrounds claiming I'm wrong...

Now if you want to write the employment options bit or tribunal bits up go ahead. i'll happily copy and paste them in...

eek
22nd January 2017, 21:31
My understanding is that your expenses would come out of your taxed income, in the same way as an employee who pays for an accountant would pay from taxed income. The 5% allowance has been removed.

Not quite the company would have to pay them out of its reserves or borrow the money from a director. Either way the company will be making a loss until it gets work that is outside IR35... I think the only exception to that would be if a company had no assets and no savings and was in the process of being closed down - in which case yes you could and would be paying accountancy fees from your own pocket...

teapot418
22nd January 2017, 21:41
What do you mean by NI contributions when it comes to personal pension payments?

And if things change I'll update the bits. But the pension section is so far me and 3 experts who have checked it against 2 people with unknown backgrounds claiming I'm wrong...




I haven't said you're wrong. I've said you're probably right, but, IMO, it is still subject to confirmation as to how employer's and employee's NI will be treated when it comes to pension payments.

You don't know my background, granted, and I'm choosing not to share it. Perhaps you could share your background? Or tell us who your experts who are prepared to commit to it being disallowed are?

At the end of the day, this is an anonymous forum. I am not trying to undermine your advice - I think it is sound, but there are caveats.

eek
22nd January 2017, 21:48
I haven't said you're wrong. I've said you're probably right, but, IMO, it is still subject to confirmation as to how employer's and employee's NI will be treated when it comes to pension payments.

You don't know my background, granted, and I'm choosing not to share it. Perhaps you could share your background? Or tell us who your experts who are prepared to commit to it being disallowed are?

At the end of the day, this is an anonymous forum. I am not trying to undermine your advice - I think it is sound, but there are caveats.

Surely its handled the way its done for all other pension payments at the moment? Let's be blunt here we aren't going to get special rules just for tax avoiders (which is what HMRC sees us as).... So yes things may change but frankly that's less likely than pigs building a rocket and landing on the moon next week.

RonBW
23rd January 2017, 07:31
If you are contributing large amounts into a pension your pension contributions will be from your post salary income not direct from your company. That means that all contributions are going to be 15-25% smaller due to National Insurance being deducted prior to it being paid into your pension. If you pay a lot into a pension you need to seriously decide on whether it would be better to use an umbrella company and pay into your pension using Salary Sacrifice.

What level is a large amount? If I pay a smaller amount, how does that work - that comes from the company still?

Sounds like it might be better to make pay an amount that isn't a large amount and not losing the NI in that case, but I guess it depends on how much you want to save and what level a contribution becomes a large amount.

Fred Bloggs
23rd January 2017, 07:42
Surely its handled the way its done for all other pension payments at the moment? Let's be blunt here we aren't going to get special rules just for tax avoiders (which is what HMRC sees us as).... So yes things may change but frankly that's less likely than pigs building a rocket and landing on the moon next week.
For pension payments with your employer, salary sacrifice is your friend. If they offer it. You can't make the employer do it, IIRC.

ladymuck
23rd January 2017, 07:45
My understanding is that your expenses would come out of your taxed income, in the same way as an employee who pays for an accountant would pay from taxed income. The 5% allowance has been removed.

I know the 5% allowance has been removed. Whilst an employee might pay for an accountant they wouldn't be expected to provide professional indemnity insurance, for example. So, this either comes out of taxed income or company reserves. Or, does a PS contractor have the requirement to hold various insurances removed, as HMRC seem to think they no longer have any cost of doing business? Similarly, I presume that the PS client will supply all equipment, including pens and cups of tea, so there is no need to purchase this from taxed income?

eek
23rd January 2017, 08:24
I know the 5% allowance has been removed. Whilst an employee might pay for an accountant they wouldn't be expected to provide professional indemnity insurance, for example. So, this either comes out of taxed income or company reserves. Or, does a PS contractor have the requirement to hold various insurances removed, as HMRC seem to think they no longer have any cost of doing business? Similarly, I presume that the PS client will supply all equipment, including pens and cups of tea, so there is no need to purchase this from taxed income?

Last public sector contract I had, I had to provide my own tea and milk.... But the logic probably is that you are being supervised and therefore surely the responsibility and insurance risk is past up to the person supervising you....

I think the issue here is that the entire purpose of these rules is to make contracting to the public sector via a limited company so unappealing you use one of the other options instead. In fact the only reason for using a limited company would be if you want to push for employment rights

RonBW
23rd January 2017, 08:35
In fact the only reason for using a limited company would be if you want to push for employment rights

Doesn't every option give you the chance to push for employment right?

Fix term contract will have some, going onto PAYE will give you some, umbrella will give you some. The way I see it, working for your own limited company is one of the most convoluted ways to get those rights because they would come from the other routes to work but not necessarily from your own company.

eek
23rd January 2017, 08:43
Doesn't every option give you the chance to push for employment right?

Fix term contract will have some, going onto PAYE will give you some, umbrella will give you some. The way I see it, working for your own limited company is one of the most convoluted ways to get those rights because they would come from the other routes to work but not necessarily from your own company.

Yep they give you rights as they factor them in to how they pay you. The reason for going to a tribunal however is the difference between:-

Umbrella £27 an hour including your holiday pay / sickness
Public Sector via tribunal - £27 an hour for every hour worked. Holiday pay / Sickness is on top of that £27 instead of being part of.

And public sector pensions are still final salary based...

eek
23rd January 2017, 08:54
For pension payments with your employer, salary sacrifice is your friend. If they offer it. You can't make the employer do it, IIRC.

Yep which is why I don't expect Agencies to offer it, but umbrella companies can and do offer salary sacrifice (although I will note that the umbrella does need to pay you the national minimum wage, only amounts above that can be put in your pension).

Fred Bloggs
23rd January 2017, 09:16
Yep they give you rights as they factor them in to how they pay you. The reason for going to a tribunal however is the difference between:-

Umbrella £27 an hour including your holiday pay / sickness
Public Sector via tribunal - £27 an hour for every hour worked. Holiday pay / Sickness is on top of that £27 instead of being part of.

And public sector pensions are still final salary based...
Hmm, not entirely true.

Three close family members of mine are all PS employees. Defined Benefit (final salary) schemes are gone.

One has a true money purchase scheme, albeit with employer contributions.
One has a career average scheme with reduced accrual rates too along with retirement age gone up from 60 to 67.
One has a career average scheme or an option to have a defined contribution scheme at lower contribution levels.

So, what you said isn't quite true.

Fred Bloggs
23rd January 2017, 09:20
Yep which is why I don't expect Agencies to offer it, but umbrella companies can and do offer salary sacrifice (although I will note that the umbrella does need to pay you the national minimum wage, only amounts above that can be put in your pension).
Sadly, as a brolly employee, you also pay your employer for the privilege of working for them too. I'm guessing you pay a brolly about GBP 50 a week just to employ you? No tax relief on that either, to boot. Kind of adds up when you're paying 42% tax, eh?

eek
23rd January 2017, 09:31
Sadly, as a brolly employee, you also pay your employer for the privilege of working for them too. I'm guessing you pay a brolly about GBP 50 a week just to employ you? No tax relief on that either, to boot. Kind of adds up when you're paying 42% tax, eh?

Most are a lot less than £50 a week.... The £50 a week ones will be paying healthy kickbacks to be on the agency's preferred supplier list.

In fact contractor umbrella's fee is £29.50 a week. The weekly take home pay for a £300 a day contract drops to £903.24 or just £15.81 less than my original IR35 calculation above.

eek
23rd January 2017, 10:15
Hmm, not entirely true.

Three close family members of mine are all PS employees. Defined Benefit (final salary) schemes are gone.

One has a true money purchase scheme, albeit with employer contributions.
One has a career average scheme with reduced accrual rates too along with retirement age gone up from 60 to 67.
One has a career average scheme or an option to have a defined contribution scheme at lower contribution levels.

So, what you said isn't quite true.

sorry yes that should be defined benefit based rather than contribution based,

SueEllen
23rd January 2017, 10:40
Yep which is why I don't expect Agencies to offer it, but umbrella companies can and do offer salary sacrifice (although I will note that the umbrella does need to pay you the national minimum wage, only amounts above that can be put in your pension).

Agencies have to auto-enrole agency workers unless they are short term ones, and only the pension scheme itself can get you to opt out.

So it will be between you and the scheme how much you want to contribute from your salary.

Fred Bloggs
23rd January 2017, 10:47
Agencies have to auto-enrole agency workers unless they are short term ones, and only the pension scheme itself can get you to opt out.

So it will be between you and the scheme how much you want to contribute from your salary.
That's not the same thing SE. Under that scenario you still get ErNIC docked out of your rate before you get it. With salary sacrifice you get save the ErNIC which would otherwise be paid and be irrecoverable.

SueEllen
23rd January 2017, 16:05
That's not the same thing SE. Under that scenario you still get ErNIC docked out of your rate before you get it. With salary sacrifice you get save the ErNIC which would otherwise be paid and be irrecoverable.

Sorry I didn't make myself clear.

When you pay into a pension the scheme provider leaves it up to you how much should automatically be taken from your salary before NI.

In a employer scheme where the employer matches/puts a percentage for a certain level of contributions they give boxes on the form for you to tick but there is always an option to put in a larger payment.

If you are one of many people who doesn't return the forms in time or at all, they will automatically just take the lowest contribution and it's up to you to sort the mess out.

Fred Bloggs
24th January 2017, 00:40
Sorry I didn't make myself clear.

When you pay into a pension the scheme provider leaves it up to you how much should automatically be taken from your salary before NI.

In a employer scheme where the employer matches/puts a percentage for a certain level of contributions they give boxes on the form for you to tick but there is always an option to put in a larger payment.

If you are one of many people who doesn't return the forms in time or at all, they will automatically just take the lowest contribution and it's up to you to sort the mess out.
That's still costing you ErNIC though, SE.

eek
24th January 2017, 07:59
Right I'm going to call what's there a first draft.

Any comments on the more recent parts (not pensions please)..

teapot418
24th January 2017, 15:01
Agency worker Regulations

Assuming you did not opt out when you signed the original contract you may be able to use the Agency Worker Regulations to ensure that after 12 weeks you get the same pay and benefits as permanent members of staff. While its likely that pushing for equal pay may not get you anywhere benefits including paid holidays may be worth pursuing.

If you did opt out of Agency worker regulations you may still be able to pursue the above action once you've proven that the opt out was administrated incorrectly - Opt outs need to be obtained prior to you being introduced to the client so any opt out issued after you have been interviewed by the client is probably invalid....

I think you're confused about opt out - the "opt out" that is often debated is of the Agency Conduct Regulations, not AWR.

It's generally accepted that AWR do not apply as we are not under the SDC of the client, and quite often the agency will ask us, as director of ourCo, to confirm that, but that is not the same thing as the opt out.

eek
24th January 2017, 15:52
I think you're confused about opt out - the "opt out" that is often debated is of the Agency Conduct Regulations, not AWR.

It's generally accepted that AWR do not apply as we are not under the SDC of the client, and quite often the agency will ask us, as director of ourCo, to confirm that, but that is not the same thing as the opt out.

Yep its not right. I need to have another look at it.

Got confused between opting out and the limited company get out that the Agency Regulations also provide.

Andy Hallett
24th January 2017, 15:52
I think you're confused about opt out - the "opt out" that is often debated is of the Agency Conduct Regulations, not AWR.

It's generally accepted that AWR do not apply as we are not under the SDC of the client, and quite often the agency will ask us, as director of ourCo, to confirm that, but that is not the same thing as the opt out.

Correct, two different pieces of legislation.

yorkshirespud
27th January 2017, 14:57
Hi all,

I take a practical view of the possible effects of the April 2017 Public Sector deemed IR35, i.e. getting paid, and the incompatibility with contract law as far as I can see.

Could someone explain to me:

1. Public sector organisation decides that all contractors are IR35, informs Agency, who then:
2. From April 2017 forwards, suddenly starts paying a different (smaller) amount/effective rate post-deductions.

Why would my own limited company at this point, state that a signed contract and schedule with a specified day rate exists between Agency company and my limited company, and then:

3. Clear commercial breach of contract between Agency and LtdCo - see you in court.

Why would I not immediately just instigate a small claims court action on the agency from my LtdCo - pay up?

(Answer, that's exactly what I will do - just asking for opinions).

Regards

MeMeMe1966
27th January 2017, 16:57
Hi all,

I take a practical view of the possible effects of the April 2017 Public Sector deemed IR35, i.e. getting paid, and the incompatibility with contract law as far as I can see.

Could someone explain to me:

1. Public sector organisation decides that all contractors are IR35, informs Agency, who then:
2. From April 2017 forwards, suddenly starts paying a different (smaller) amount/effective rate post-deductions.

Why would my own limited company at this point, state that a signed contract and schedule with a specified day rate exists between Agency company and my limited company, and then:

3. Clear commercial breach of contract between Agency and LtdCo - see you in court.

Why would I not immediately just instigate a small claims court action on the agency from my LtdCo - pay up?

(Answer, that's exactly what I will do - just asking for opinions).

Regards

So I think that you would easily be able to get the employers NI back (if the contract doesn't specifically state that they can with-hold it from your agreed daily rate) as the draft legislation makes it clear that it is the fee payers responsibility. As for the income tax and employees NI however I'm not sure? The legal concept of equity in contract law (something about coming to the law with clean hand) says something about a contract cannot be enforced that requires one party to do something illegal. Therefore the agency could claim that not withholding tax and NI when the legislation requires them to is illegal and they cannot be forced to do so by the contract.

runandbecome
27th January 2017, 17:40
Hi all,

I take a practical view of the possible effects of the April 2017 Public Sector deemed IR35, i.e. getting paid, and the incompatibility with contract law as far as I can see.

Could someone explain to me:

1. Public sector organisation decides that all contractors are IR35, informs Agency, who then:
2. From April 2017 forwards, suddenly starts paying a different (smaller) amount/effective rate post-deductions.

Why would my own limited company at this point, state that a signed contract and schedule with a specified day rate exists between Agency company and my limited company, and then:

3. Clear commercial breach of contract between Agency and LtdCo - see you in court.

Why would I not immediately just instigate a small claims court action on the agency from my LtdCo - pay up?

(Answer, that's exactly what I will do - just asking for opinions).

Regards

Was wondering this myself you've signed a contract for so many months and a 3rd party has cut that contract. Can we take hmrc to court for interfering with our contract?

DaveB
27th January 2017, 17:47
Was wondering this myself you've signed a contract for so many months and a 3rd party has cut that contract. Can we take hmrc to court for interfering with our contract?

Nope, the agency will terminate the existing contract, citing whatever grounds they see fit, and issue a new one with the revised payment conditions. If you object to that you won't be given a new contract to sign. The very fact that the law has changed will probably be cause enough for them to justify revising the contacts to keep them legal.

There is no getting around this, there will be no sneaky get outs or legal recourse. If you don't want to be paying full PAYE and NI come April 5th you need to be getting your notice in now and telling your Public Sector clients exactly why you are leaving.

eek
27th January 2017, 17:53
Nope, the agency will terminate the existing contract, citing whatever grounds they see fit, and issue a new one with the revised payment conditions. If you object to that you won't be given a new contract to sign. The very fact that the law has changed will probably be cause enough for them to justify revising the contacts to keep them legal.

There is no getting around this, there will be no sneaky get outs or legal recourse. If you don't want to be paying full PAYE and NI come April 5th you need to be getting your notice in now and telling your Public Sector clients exactly why you are leaving.

It also depends on the terms of your contract. As I commented earlier today someone elsewhere had a contract that allowed tax to be deducted from payments if the agency was required to do so...

eek
27th January 2017, 17:54
In other news the NI regulation changes are now up at https://www.gov.uk/government/publications/draft-legislation-the-social-security-miscellaneous-amendments-regulations-2017

That's not really of interest:-

Page 2 of this however https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/586617/Fast_scan_to_a_B_W_PDF_file_3.pdf states that otherwise the person would be treated as an employee (sorry I haven't posted a quote its a pdf image file rather than text). If anyone was going for rights via a tribunal I suspect it is employee rights you are aiming for not worker rights.

cojak
28th January 2017, 08:58
In other news the NI regulation changes are now up at https://www.gov.uk/government/publications/draft-legislation-the-social-security-miscellaneous-amendments-regulations-2017

That's not really of interest:-

Page 2 of this however https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/586617/Fast_scan_to_a_B_W_PDF_file_3.pdf states that otherwise the person would be treated as an employee (sorry I haven't posted a quote its a pdf image file rather than text). If anyone was going for rights via a tribunal I suspect it is employee rights you are aiming for not worker rights.


Let me do that for you...
http://i963.photobucket.com/albums/ae111/cojakuk/PSIR35_zpsdxv33tbx.png (http://s963.photobucket.com/user/cojakuk/media/PSIR35_zpsdxv33tbx.png.html)

yorkshirespud
29th January 2017, 22:01
It also depends on the terms of your contract. As I commented earlier today someone elsewhere had a contract that allowed tax to be deducted from payments if the agency was required to do so...

The contract was signed before Christmas, and I've rechecked it, it has no reference to withholding of tax in any situation.

As soon as any payment comes in light, I'm going straight to the court for breach of contract.

cojak
29th January 2017, 22:52
The contract was signed before Christmas, and I've rechecked it, it has no reference to withholding of tax in any situation.

As soon as any payment comes in light, I'm going straight to the court for breach of contract.

Well I hope you're successful with this, good luck yorkshirespud.

b r
30th January 2017, 11:10
The contract was signed before Christmas, and I've rechecked it, it has no reference to withholding of tax in any situation.

As soon as any payment comes in light, I'm going straight to the court for breach of contract.

Surely though the change is due to a change in the law, and this change to the law was known about when you (both) signed the contract - so can't see what you think you'll gain?

DaveB
30th January 2017, 11:21
The contract was signed before Christmas, and I've rechecked it, it has no reference to withholding of tax in any situation.

As soon as any payment comes in light, I'm going straight to the court for breach of contract.

Won't happen. Come April, once the client informs the agency that you are now deemed to be inside IR35, your contract will be terminated and a new one issued containing the revised payment terms. They will be entitled to do this as they are simply reflecting a change in legislation and legal obligations, and not to do so would negate the contract anyway. Your choice will be to sign it or walk away.

eek
30th January 2017, 11:25
Won't happen. Come April, once the client informs the agency that you are now deemed to be inside IR35, your contract will be terminated and a new one issued containing the revised payment terms. They will be entitled to do this as they are simply reflecting a change in legislation and legal obligations, and not to do so would negate the contract anyway. Your choice will be to sign it or walk away.

That's what makes early April such a problem for Agencies. To get past the rules they need to get all of March's payments done by April 5th - most agencies I've spoken to are dreading it but have an additional one off payroll run scheduled.

yorkshirespud
30th January 2017, 13:30
That's what makes early April such a problem for Agencies. To get past the rules they need to get all of March's payments done by April 5th - most agencies I've spoken to are dreading it but have an additional one off payroll run scheduled.

From what I've seen so far, both the PS client and Agency have their heads in the sand and hope it all goes away.

I actually feel a little sympathy for the Agencies (not too much mind) as the Agency effectively has to become the enforcer for any PS client decision. Again, what I've seen, the Agency is not set up at all to make NIC/Tax payments etc, and have not prepared at all, in their contracts or payments setup.

Bottom line, I don't think PS client or Agent will do anything proactively, including cancelling contracts, which leaves them wide open to legal action if they end up withholding payments.

Andy Hallett
30th January 2017, 17:39
Bottom line, I don't think many PS clients or Agents will do anything proactively, including cancelling contracts, which leaves them wide open to legal action if they end up withholding payments.

I've fixed it for you. We are very prepared.

electronicfur
3rd February 2017, 09:14
My company is being offered a direct contract in the public sector. 99% of the work is done from my own office, and my company currently provides services for this public sector organisation via another company, a small consultancy, currently outside IR35. Have control, right of substitution, etc.

I understand the decision on whether the contract is within IR35 will now be up to the public sector organisation. Is there any way if I sign a contract now, that I can ensure the contract terms are such that it will be deemed outside of IR35, and that there is no comeback to me if it is later deemed to be inside? The organisation have an urgent need for my speciality so I may be able to dictate the terms.

I also dont want to take the contract if it has a high risk of being terminated in April because of the changes.

Advice appreciated.

northernladuk
3rd February 2017, 09:15
I've nearly fixed it for you. We are very prepared.

You are supposed to bold the bit you've FTFY'd. You should know better!! :spank:

teapot418
3rd February 2017, 09:50
My company is being offered a direct contract in the public sector. 99% of the work is done from my own office, and my company currently provides services for this public sector organisation via another company, a small consultancy, currently outside IR35. Have control, right of substitution, etc.

I understand the decision on whether the contract is within IR35 will now be up to the public sector organisation. Is there any way if I sign a contract now, that I can ensure the contract terms are such that it will be deemed outside of IR35, and that there is no comeback to me if it is later deemed to be inside? The organisation have an urgent need for my speciality so I may be able to dictate the terms.

I also dont want to take the contract if it has a high risk of being terminated in April because of the changes.

Advice appreciated.

Ask the organisation to make the determination now, and put it in the contract that both parties agree that the contract is not subject to IR35 (in proper legalese, obv.)

electronicfur
3rd February 2017, 10:35
Ask the organisation to make the determination now, and put it in the contract that both parties agree that the contract is not subject to IR35 (in proper legalese, obv.)

Is there a way to avoid the scenario that they do that, and then come April they decide they don't want the associated risk and terminate the contract?

They need my services most urgently in the next two months, hence my question.

teapot418
3rd February 2017, 10:45
Is there a way to avoid the scenario that they do that, and then come April they decide they don't want the associated risk and terminate the contract?

They need my services most urgently in the next two months, hence my question.

Not unless the contract has termination penalties, which is unlikely, and goes against MOO which is a key IR35 indicator.

electronicfur
8th February 2017, 11:49
Not unless the contract has termination penalties, which is unlikely, and goes against MOO which is a key IR35 indicator.

Thanks. Decided to walk away and go back to the private sector from now on.

eek
11th February 2017, 10:56
Added bit to the top - Is my client caught by the rules.

Moved the consultancy question up to slot in beneath it as both have been frequent questions.

Any improvements on either answer gratefully received.

RonBW
11th February 2017, 11:05
Added bit to the top - Is my client caught by the rules.

Moved the consultancy question up to slot in beneath it as both have been frequent questions.

Any improvements on either answer gratefully received.

One unknown on if the client is caught is what happens to certain agencies of departments that are exempt - eg MI5 are exempt from FoI but are part of MoD who are not exempt. So if I contract for MI5, so the new rules apply?

They are undoubtedly public sector but not subject to the definition for IR35 purposes.

eek
11th February 2017, 11:29
One unknown on if the client is caught is what happens to certain agencies of departments that are exempt - eg MI5 are exempt from FoI but are part of MoD who are not exempt. So if I contract for MI5, so the new rules apply?

They are undoubtedly public sector but not subject to the definition for IR35 purposes.

MI5 is the responsibility of the Home Office - and I'm not sure if its worth adding as it just adds complexity to what I think should be a fairly simple answers to the basic questions..

RonBW
11th February 2017, 11:50
MI5 is the responsibility of the Home Office - and I'm not sure if its worth adding as it just adds complexity to what I think should be a fairly simple answers to the basic questions..

OK - so are MI5 public sector or not? What about other parts of other departments who aren't subject to FoI?

I agree it adds complexity, but the point is that even on a simple question like this there isn't a straightforward answer.

SueEllen
11th February 2017, 16:22
OK - so are MI5 public sector or not? What about other parts of other departments who aren't subject to FoI?

I agree it adds complexity, but the point is that even on a simple question like this there isn't a straightforward answer.

MI5 are public sector but there are good reasons which anyone with common sense can work out why they aren't subject to FOI.

RonBW
11th February 2017, 18:02
MI5 are public sector but there are good reasons which anyone with common sense can work out why they aren't subject to FOI.

So they are definitely covered by the new legislation?

SueEllen
11th February 2017, 18:06
So they are definitely covered by the new legislation?

I could tell you but I would have to kill you afterwards.

northernladuk
11th February 2017, 18:10
MI5 are public sector but there are good reasons which anyone with common sense can work out why they aren't subject to FOI.

I think the terminology is the key. They are exempt which means they are in the same PS area but the FOI can't be used for them and other security bodies. Which is different to saying FOI doesn't apply in the same way it doesn't apply to a private company..

That make sense? They are within scope being a PS but exempt so yes you would expect the legislation to apply... unless they are exempt from that as well but we've not hear otherwise.

https://ico.org.uk/media/for-organisations/documents/1182/security_bodies_section_23_foi.pdf

Andy Hallett
11th February 2017, 18:52
One unknown on if the client is caught is what happens to certain agencies of departments that are exempt - eg MI5 are exempt from FoI but are part of MoD who are not exempt. So if I contract for MI5, so the new rules apply?

They are undoubtedly public sector but not subject to the definition for IR35 purposes.

You'd be the worst spy in history!

Depends which organisation pays. If MI5 is a legal entity discrete from home office and not subject to FOI then the rules will not apply.

Same goes for GCHQ.

malvolio
11th February 2017, 18:53
Actually I suspect the real answer is that they are covered by FOI but will not be able to release any information to the public because of its sensitive nature.

I'm not betting the mortgage on the new rules not applying...

Andy Hallett
11th February 2017, 19:04
Actually I suspect the real answer is that they are covered by FOI but will not be able to release any information to the public because of its sensitive nature.

I'm not betting the mortgage on the new rules not applying...

"Yes Mr HMRC, we have made a determination, but we can't tell you"

northernladuk
11th February 2017, 19:14
Actually I suspect the real answer is that they are covered by FOI but will not be able to release any information to the public because of its sensitive nature.

I'm not betting the mortgage on the new rules not applying...

This is what I think and says more or less what I was trying to put in my post.

Section 23 (Security Bodies) mentions a link between MI5 and the Home Office.

https://ico.org.uk/media/1182/security_bodies_section_23_foi.pdf

Talks about exemptions and not having to confirm or deny it holds information etc.

I'm not 100% convinced the fact MI5 doesn't have to provide FOI means it's not outside the scope of the legislation.

SueEllen
11th February 2017, 21:22
Actually I suspect the real answer is that they are covered by FOI but will not be able to release any information to the public because of its sensitive nature.

I'm not betting the mortgage on the new rules not applying...

The ICO website says they have an "absolute exemption".

Lots of laws clearly have written in them that there is an exemption for reasons of national security. This tax change has no such exemption.

All the security services openly and clearly state they are governmental bodies and you can find out the relevant secretary of state/minister in charge of them. So if they are public sector bodies what else is?

RonBW
11th February 2017, 22:21
The ICO website says they have an "absolute exemption".

Lots of laws clearly have written in them that there is an exemption for reasons of national security. This tax change has no such exemption.

All the security services openly and clearly state they are governmental bodies and you can find out the relevant secretary of state/minister in charge of them. So if they are public sector bodies what else is?

National Crime Agency? Non-ministerial department, run by the government, not bound by FoI. So according to post 1 they don't have to apply the rules even though they are clearly public sector.

teapot418
11th February 2017, 22:28
National Crime Agency? Non-ministerial department, run by the government, not bound by FoI. So according to post 1 they don't have to apply the rules even though they are clearly public sector.

I think that's right - if they're not covered by the FOI act, then they don't have to apply the rules.

eek
11th February 2017, 22:33
National Crime Agency? Non-ministerial department, run by the government, not bound by FoI. So according to post 1 they don't have to apply the rules even though they are clearly public sector.

Let's be blunt here We don't know about the examples you keep hitting us with and I don't care whether they are impacted or not but you can see that no one here has a clue (and neither proboably do those departments)

If you work in such a department you may be impacted, you may be able to avoid. Personally I wouldn't be taking any risk and would be leaving..

BigRed
11th February 2017, 22:33
If I accept a new contract in the public sector then, I should reduce dividends to <£5000 each for the two shareholders, which will reduce the company warchest; cancel all my company related insurance; think about salary sacrifice into pension which by law would be offered by the agency regardless.

Do I sack my wife who is employed as a bookkeeper as she is surplus to requirements now? Do I give her a generous termination package?

Regarding pensions, I recently took the lump sum from a final salary pension as I thought receiving it tax free and contributing to an stocks and shares ISA would be the most efficient but I'm now unsure about the rules on recycling benefits if I wish to do salary sacrifice.

Regarding the tax, I think saying it will be weekly rate X 52 is a little simplistic as I thought it was always calculated based on the year to date extrapolated to the full year, so there will be a little overpayment initially for many but as holidays and sickness cick in this will reduce.

SueEllen
11th February 2017, 22:47
National Crime Agency? Non-ministerial department, run by the government, not bound by FoI. So according to post 1 they don't have to apply the rules even though they are clearly public sector.

They are exempt from FOI due to reasons of national security but that doesn't mean those who are contractors for them are exempt from IR35 regulations as it is up to the end-client to determine that.

You are desperately trying to read a UK law specifically a tax regulation as black and white, but if you know anything about laws in the UK and specifically tax regulations they are rarely black and white.

SueEllen
11th February 2017, 22:49
If I accept a new contract in the public sector then, I should reduce dividends to <£5000 each for the two shareholders, which will reduce the company warchest; cancel all my company related insurance; think about salary sacrifice into pension which by law would be offered by the agency regardless.

Do I sack my wife who is employed as a bookkeeper as she is surplus to requirements now? Do I give her a generous termination package?

Regarding pensions, I recently took the lump sum from a final salary pension as I thought receiving it tax free and contributing to an stocks and shares ISA would be the most efficient but I'm now unsure about the rules on recycling benefits if I wish to do salary sacrifice.

Regarding the tax, I think saying it will be weekly rate X 52 is a little simplistic as I thought it was always calculated based on the year to date extrapolated to the full year, so there will be a little overpayment initially for many but as holidays and sickness cick in this will reduce.

Get a role in the private sector then nothing is stopping you, and by the time the government tries to bring it in successfully to the private sector you should be able to retire.

northernladuk
11th February 2017, 22:56
If I accept a new contract in the public sector then, I should reduce dividends to <£5000 each for the two shareholders, which will reduce the company warchest; cancel all my company related insurance; think about salary sacrifice into pension which by law would be offered by the agency regardless.

Do I sack my wife who is employed as a bookkeeper as she is surplus to requirements now? Do I give her a generous termination package?

Regarding pensions, I recently took the lump sum from a final salary pension as I thought receiving it tax free and contributing to an stocks and shares ISA would be the most efficient but I'm now unsure about the rules on recycling benefits if I wish to do salary sacrifice.

Regarding the tax, I think saying it will be weekly rate X 52 is a little simplistic as I thought it was always calculated based on the year to date extrapolated to the full year, so there will be a little overpayment initially for many but as holidays and sickness cick in this will reduce.

WTF are you on?

BigRed
11th February 2017, 23:04
Sadly, I finished my last contract end of January and there doesn't seem much out there. This is local and offering a really good rate for PS. I really don't want extended bench time at this time of year while the kids are at school and it soon adds up.

BigRed
11th February 2017, 23:07
WTF are you on?

A rather nice Pinot Gris.

northernladuk
12th February 2017, 01:00
A rather nice Pinot Gris.

Sounds like it.

KC1
12th February 2017, 03:47
With the likes of Sellafield and Magnox being private limited companies, can they be classed as PS and are they covered by the FOI act?

eek
12th February 2017, 08:10
With the likes of Sellafield and Magnox being private limited companies, can they be classed as PS and are they covered by the FOI act?

A two second Google search (Sellafield freedom information) brings up Freedom of Information | Sellafield Ltd (http://www.sellafieldsites.com/company/freedom-of-information/) so yes they are included.

eek
12th February 2017, 09:47
Sadly, I finished my last contract end of January and there doesn't seem much out there. This is local and offering a really good rate for PS. I really don't want extended bench time at this time of year while the kids are at school and it soon adds up.

So go for it provided you can get the figures to stack up. There is no problem going for public sector work if that's the best deal around. You just need to go in with yours eyes open knowing that you are being paid PAYE without expenses and you may hit thresholds that impact other things like child benefit..

As for the questions in your previous post - how you run your business is your own affair. I don't however personally believe your accounts require more than 1 hour a month to do so claiming for a book keeper is probably a bit rich..

KC1
12th February 2017, 21:46
A two second Google search (Sellafield freedom information) brings up Freedom of Information | Sellafield Ltd (http://www.sellafieldsites.com/company/freedom-of-information/) so yes they are included.
Yes I found this too. I didn't think a private limited company could be classed as PS. What I'm unclear about is how could a private company be covered under the FOI Act?

Surely the new legislation needs to be clear that the criteria is not being PS (which is the majority of the case), but the true measure is whether the organisation is under the FOI Act. Also it seems unreal that the reliance is on searching Google for the answer and not based on a definitive list from HMRC?

Apologies if this is a stupid or obvious question but why does the new legislation only affect PS for now?

SueEllen
12th February 2017, 21:59
Yes I found this too. I didn't think a private limited company could be classed as PS. What I'm unclear about is how could a private company be covered under the FOI Act?

Surely the new legislation needs to be clear that the criteria is not being PS (which is the majority of the case), but the true measure is whether the organisation is under the FOI Act. Also it seems unreal that the reliance is on searching Google for the answer and not based on a definitive list from HMRC?

Apologies if this is a stupid or obvious question but why does the new legislation only affect PS for now?

Can you explain why you think HMRC would give you a black and white answer when they haven't previously with IR35 and other tax issues?

The private sector can easily take steps to avoid this as their only duty is to make money for their shareholders.

KC1
12th February 2017, 23:39
Can you explain why you think HMRC would give you a black and white answer when they haven't previously with IR35 and other tax issues?
Maybe I'm just naive and expected clarity. I agree IR35 is complicated but the principle of it is simple and it is to prove disguised employment. The interpretation of various aspects is open to discussion and this is where cases are won or lost. However with this new legislation there is just no logic other than to increase tax revenue. There is no case to fight for. IR35 just seems to be used as the excuse to enforce the rules. Guilty before proven innocent.


The private sector can easily take steps to avoid this as their only duty is to make money for their shareholders.
The new legislation is around IR35 (effectively disguised employment) within the PS. I guess there is still a lack of detail from the government/HMRC, and we are still waiting for this status tool to be released. However is this tool going to change the position as it is now? From what I've read it is blanket coverage that every PCS providing contracting services to the PS (or covered by the FOI Act) are automatically in scope of IR35, and classed as off payroll working, without a case to fight whether it is disguised employment or not.

I still don't understand why only PS, other than the government has a greater interest in it as it's 'their' money being spent on PCS services. However the whole objective is to maximise taxation, so therefore why not applied in general to everything (public and private), just like IR35 could be?

northernladuk
13th February 2017, 00:25
There is a definitive list. I posted the link in one of the threads awhile ago.

I can't find it but this is an interesting one.

https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/datasets/publicsectorclassificationguide

I'm on my phone so can't browse it properly but looks useful?

eek
13th February 2017, 07:08
I still don't understand why only PS, other than the government has a greater interest in it as it's 'their' money being spent on PCS services. However the whole objective is to maximise taxation, so therefore why not applied in general to everything (public and private), just like IR35 could be?

Because it is only in the public sector that HMRC have the additional leverage of being able to fire the management if it doesn't adopt the correct approach (as HMG / HMRC see it). It also means that it can be tested early and any snags resolved before rolling it out to the private sector where companies are likely to fight harder against it/

It's also the fact that this has been planned for years to be slowly implemented. Starting with the Agency Reporting Regulations you then have no expenses for umbrella companies and those using a limited company inside IR35 - next this....

Fred Bloggs
13th February 2017, 08:07
Because it is only in the public sector that HMRC have the additional leverage of being able to fire the management if it doesn't adopt the correct approach (as HMG / HMRC see it). It also means that it can be tested early and any snags resolved before rolling it out to the private sector where companies are likely to fight harder against it/

It's also the fact that this has been planned for years to be slowly implemented. Starting with the Agency Reporting Regulations you then have no expenses for umbrella companies and those using a limited company inside IR35 - next this....
And even then, certain people were so busy navel gazing, they never saw it coming.

eek
13th February 2017, 08:32
And even then, certain people were so busy navel gazing, they never saw it coming.

I'm not going there again....

LondonManc
13th February 2017, 08:42
I'm not going there again....

Please do, it's rivalling your Passat rental story for most tedious anecdote. :)

eek
13th February 2017, 08:50
Please do, it's rivalling your Passat rental story for most tedious anecdote. :)

I only bring that up when people are looking for lease cars - to show its FAR better to go for what the manufacturer wants to lease that week rather than what you want...

northernladuk
13th February 2017, 09:02
I only bring that up when people are looking for lease cars - to show its FAR better to go for what the manufacturer wants to lease that week rather than what you want...

You've got a lease car? What is it? Get a good deal or something?

eek
13th February 2017, 09:29
You've got a lease car? What is it? Get a good deal or something?

:laugh

BigRed
14th February 2017, 22:30
Given that an IR35 investigation interviews the clients and establishes working practices, not what's in the contract, I do wonder if the client should always have determined the IR35 status and advertised the position as in or out. It would certainly focus their minds if they had to change a £400 rate to £550 to cover the difference.

eek
3rd March 2017, 21:20
Updated the ESS bit now its available...

teapot418
26th March 2017, 06:59
Deleted at the request of teapot418

Very mature. Your advice is great. Your attitude sucks.

eek
26th March 2017, 07:08
Very mature. Your advice is great. Your attitude sucks.

**** off. I'm fed up with people complaining and not actually helping and you are the prime example.

As such my current decision is to take a break and i'm just tidying a few things up before i go.

If people are caught our because of that meh. For the rest of my days i can say i posted helpful information until people started complaining about me helping. And then i left.

Do onto others as you would like to be treated yourself has been my motto for many years - and it stands me in a good position.

Today I'm simply treating others in the way some people think I do and doing onto others how they treat / regard me and you alongside Semtex are 2 people who are behind my change in position here. Which means I'm happy to go the whole hog and delete the posts.

Which means the faq is gone and courts will be used regarding breach of copyright if it reappears.

teapot418
26th March 2017, 07:37
Retrospective Claims

Deleted as i made it all up according to teapot418

citation? :rolleyes:

teapot418
26th March 2017, 07:39
As I've said many times, eek's posts give good advice.

For those who will benefit from the excellent FAQs, they can be found here

http://forums.contractoruk.com/public-sector-ir35/120460-faqs-those-looking-deleted-posts.html

eek
26th March 2017, 07:51
As I've said many times, eek's posts give good advice.

For those who will benefit from the excellent FAQs, they can be found here

http://forums.contractoruk.com/public-sector-ir35/120460-faqs-those-looking-deleted-posts.html

You've changed your tone mate. Doesn't make any difference though as i still want that deleted.

The attacks of some people on here have been utterly unprofessional and trying to recover from here is pointless - i simply woke up this morning saw your comment from last night and thought i would adopt the attitude you believe i had. It's interesting to watch how you try to recover from that but recovering those deleted posts isn't actually going to go down well anywhere and i will ensure they are removed even if it costs me actual money.

If you want an faq rewrite it from scratch.

teapot418
26th March 2017, 07:57
You've changed your tone mate. Doesn't make any difference though as i still want that deleted.

The attacks of some people on here have been utterly unprofessional and trying to recover from here is pointless - i simply woke up this morning saw your comment from last night and thought i would adopt the attitude you believe i had. It's interesting to watch how you try to recover from that but recovering those deleted posts isn't actually going to go down well anywhere and i will ensure they are removed even if it costs me actual money.

If you want an faq rewrite it from scratch.

Nope, my tone hasn't changed. Your posts are useful. I don't believe I've ever said otherwise. Your arrogance isn't.

Your prerogative. Have a nice holiday.

Happy for the mods to remove the quoted thread if they think it is a breach of copyright.

eek
26th March 2017, 08:06
Nope, my tone hasn't changed. Your posts are useful. I don't believe I've ever said otherwise. Your arrogance isn't.

Your prerogative. Have a nice holiday.

Happy for the mods to remove the quoted thread if they think it needs removing.

It does.

RonBW
26th March 2017, 09:31
Which means the faq is gone and courts will be used regarding breach of copyright if it reappears.

Anyone quoting this post will be sued for breach of copyright too :laugh

Semtex
26th March 2017, 10:09
**** off. I'm fed up with people complaining and not actually helping and you are the prime example.

As such my current decision is to take a break and i'm just tidying a few things up before i go.

If people are caught our because of that meh. For the rest of my days i can say i posted helpful information until people started complaining about me helping. And then i left.

Do onto others as you would like to be treated yourself has been my motto for many years - and it stands me in a good position.

Today I'm simply treating others in the way some people think I do and doing onto others how they treat / regard me and you alongside Semtex are 2 people who are behind my change in position here. Which means I'm happy to go the whole hog and delete the posts.

Which means the faq is gone and courts will be used regarding breach of copyright if it reappears.

no one is doubting your content on this subject just the way your arrogance and your forum beli'eek'ers follow your tone to limit.

many people have benefitted, but many others have switched off due to the mini clique with you and your buddies

cojak
26th March 2017, 15:22
Since there's no point to this thread anymore I'm locking and I sticking it.