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Sn3md
13th March 2017, 16:51
I do locum work for the NHS but also a little bit of private ad hoc work as well.

My question is.. can I just continue to work through my Limited Company and be taxed PAYE?

I don't understand the benefit of umbrellas when:
A) they charge a weekly fee (which would be more than my accountant fee)
B) you can not claim expenses

My agency say they would let me continue working through my Limited Company but I would be taxed as an employee.

Obviously I can no longer claim business expenses through my company.. which is a whole other issue.

But why would an umbrella be so much better than being taxed at source for your Limited Company or being an employee of the agency?

northernladuk
13th March 2017, 18:38
Plenty of threads now around about umbrella vs PAYE....

Try having a dig around using the search method as detailed here. Limit it to the IR35 section and you should be golden.

http://forums.contractoruk.com/welcome-faqs/58311-searching-cuk-forums.html

eek
13th March 2017, 18:50
See http://forums.contractoruk.com/public-sector-ir35/118956-whats-changed-faq.html#post2360157 and the post underneath it.

The reason for using an umbrella boils down to ease of use (both for you and especially the agency) and pensions

Aceofgas
13th March 2017, 20:44
I do locum work for the NHS but also a little bit of private ad hoc work as well.

My question is.. can I just continue to work through my Limited Company and be taxed PAYE?

I don't understand the benefit of umbrellas when:
A) they charge a weekly fee (which would be more than my accountant fee)
B) you can not claim expenses

My agency say they would let me continue working through my Limited Company but I would be taxed as an employee.

Obviously I can no longer claim business expenses through my company.. which is a whole other issue.

But why would an umbrella be so much better than being taxed at source for your Limited Company or being an employee of the agency?

You probably can continue using your company for private ad hoc work. With this stream you can still account for expenses.
The NHS is going PAYE and using your company for these payments is up to you. Beyond this I have evidence of an NHS Trust refusing to accept any candidates still employed by a PSC and also refusing to pay any fees into a business bank account.
Using an umbrella may be a requirement by some agencies. You work through an umbrella or you do not get any work if you don't.
The next point of contention is going to be various arguments about employers NI by whoever classifies as the employer.

Sn3md
13th March 2017, 22:19
Thanks for your replies. I think I'm going to continue working through my company for as long as they let me. I mean, I'm pretty much screwed either way!

Scrag Meister
15th March 2017, 13:27
This is the situation that Mrs Scrag Meister finds herself in, being a locum for a council.

Her agency haven't said anything will change, so as long as her accountants process it all in line with PAYE then there shouldn't be any issue?

I suggested this was the case to just declare yourself inside IR35 and take the hit, or get a rate rise if possible.

So grey and unclear, and such a short time until it all comes into effect.

LondonManc
15th March 2017, 13:31
Thanks for your replies. I think I'm going to continue working through my company for as long as they let me. I mean, I'm pretty much screwed either way!

Yep, all because someone saw contractor day rates and got jealous, without thinking about the risks that go with it.

DotasScandal
15th March 2017, 14:02
Yep, all because someone saw contractor day rates and got jealous, without thinking about the risks that go with it.

Britain practically invented politics of envy.

Qdos Contractor
15th March 2017, 14:16
This is the situation that Mrs Scrag Meister finds herself in, being a locum for a council.

Her agency haven't said anything will change, so as long as her accountants process it all in line with PAYE then there shouldn't be any issue?

I suggested this was the case to just declare yourself inside IR35 and take the hit, or get a rate rise if possible.

So grey and unclear, and such a short time until it all comes into effect.

No - the deductions have to be made by the fee payer (agency). Unless the legislation is adjusted before it's released, you won't be able to simply operate inside IR35 as you could do pre-6th April.

LondonManc
15th March 2017, 15:45
Britain practically invented politics of envy.

Correct. We don't exactly champion our champions. No wonder as soon as the brighter people get successful they generally want to cash in and fade out of the limelight.

Sn3md
15th March 2017, 19:41
My accountant has raised something which might be of interest.

In the new legislation it states that the fee payer cannot deduct secondary (employer) NI from a fee that has already been agreed with a limited company.

He believes this gives me a right to argue that they should pay employers NI and it should not come from my pay rate.

northernladuk
15th March 2017, 19:44
Surely you shouldn't be engaging through a Ltd at all and be PAYE or brolly? I thought post 9 form QDOS covered it.

But HMRC have just smashed in to PS without a thought of the fallout and putting all the risk on agencies/clients. Not sure arguing this is going to make any difference?

RonBW
15th March 2017, 20:17
My accountant has raised something which might be of interest.

In the new legislation it states that the fee payer cannot deduct secondary (employer) NI from a fee that has already been agreed with a limited company.

He believes this gives me a right to argue that they should pay employers NI and it should not come from my pay rate.

That's correct. It would be illegal for the agency to deduct employers NI and apprenticeship levy directly from your rate.

However, they could charge an additional fee to either you or the end client which just happens to match the contribution that they have to hand over. IANAL, but they would need to word that incredibly carefully in the contract IMHO.

Sn3md
15th March 2017, 20:40
Could they really charge an additional fee to me after I've signed a contract? I have a feeling they will try to force me to sign a new contract.. which isn't at all fair (or legal?). And I am the customer after all.

So basically working through my Limited Company I should technically only have income tax and employees NI deducted.

But working as an agency employee or umbrella I will have employers NI, employees NI and income tax deducted?

Am I stupid or is this correct?

northernladuk
15th March 2017, 20:43
The just terminate your old on as per notice period and offer you another with amended terms. All fair and legal.

Why so eager to keep through your limited if you don't mind me asking? What are the advantages over a brolly or PAYE?

Sn3md
15th March 2017, 21:03
Because I need to keep my company open for private work, accountants fees are equivalent to umbrella fees and I would like to retain as much of my pay rate as possible (I.e. Not pay employers NI from my pay rate if I can).

I also just feel this unnecessary push from the agency to join an umbrella and I'm confused as to their purpose now that expenses can no longer be claimed. I have to pay for my own indemnity insurance anyway and I don't want a pension as I'm an expat.

northernladuk
15th March 2017, 21:05
Interesting. Thanks.

Qdos Contractor
15th March 2017, 22:58
Surely you shouldn't be engaging through a Ltd at all and be PAYE or brolly? I thought post 9 form QDOS covered it.

You can still go through ltd but PAYE/NI would be deducted by the agency and you'd get paid net. You'd then have offsets to ensure you weren't paying tax twice.

In reality many agencies aren't going want to handle the payroll requirements, which will mix employment tax with VAT, so a push towards brollies is likely.

Qdos Contractor
15th March 2017, 23:07
Could they really charge an additional fee to me after I've signed a contract? I have a feeling they will try to force me to sign a new contract.. which isn't at all fair (or legal?). And I am the customer after all.

So basically working through my Limited Company I should technically only have income tax and employees NI deducted.

But working as an agency employee or umbrella I will have employers NI, employees NI and income tax deducted?

Am I stupid or is this correct?

They won't be able to deduct Ers NI, although they might look to reduce your rate to cover it.

Technically umbrellas don't actually 'deduct' Ers NI - from a legal perspective it is an additional fee levied on the gross pay. I've always found it slightly odd that they've been able to specifically reference Ers NI on payslips.

gables
16th March 2017, 09:59
They won't be able to deduct Ers NI, although they might look to reduce your rate to cover it.

Technically umbrellas don't actually 'deduct' Ers NI - from a legal perspective it is an additional fee levied on the gross pay. I've always found it slightly odd that they've been able to specifically reference Ers NI on payslips.

And what they should really should do is increase the rate to the client, after all the client made the inside determination. If they want to determine people as staff there should be a consequence.

northernladuk
16th March 2017, 10:04
And what they should really should do is increase the rate to the client, after all the client made the inside determination. If they want to determine people as staff there should be a consequence.

Who is 'they' in that? I think you are confusing two different entities using the same word.

gables
16th March 2017, 10:11
And what they should really should do is increase the rate to the client, after all the client made the inside determination. If they want to determine people as staff there should be a consequence.


Who is 'they' in that? I think you are confusing two different entities using the same word.

My bad, should have typed

And what the agent should really should do is increase the rate to the client, after all the client made the inside determination. If the client want to determine people as staff there should be a consequence.

Viv
31st March 2017, 18:51
My accountant has raised something which might be of interest.

In the new legislation it states that the fee payer cannot deduct secondary (employer) NI from a fee that has already been agreed with a limited company.

He believes this gives me a right to argue that they should pay employers NI and it should not come from my pay rate.

Can anyone let me know please where I can find this official legislation as I need it to show the agency

LoughriggFell
1st April 2017, 08:06
Can anyone let me know please where I can find this official legislation as I need it to show the agency

I haven't seen that reference, so don't know, but I think a likely place would be in the Finance Bill (No. 2) 2017, Schedule 1, Workers Services provided to Public sector through Intermediaries starting at page 128

Andy Hallett
3rd April 2017, 06:44
Can anyone let me know please where I can find this official legislation as I need it to show the agency

I'd suggest your agency are in for an exciting week if they were unaware of this legislation.