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psychocandy
18th April 2017, 08:37
Just started an inside PS contract....

Obviously, someone has now got to do the payroll side of things. Agency won't do (I expect this is a common thread!) and insisted either umbrella or a payroll solution.

I was hoping to still run through my ltd but, in the end, it had to get sorted so I signed up for umbrella for now.

Still hoping I can get something sorted though for next extension. Any suggestions?

DaveB
18th April 2017, 08:45
Just started an inside PS contract....

Obviously, someone has now got to do the payroll side of things. Agency won't do (I expect this is a common thread!) and insisted either umbrella or a payroll solution.

I was hoping to still run through my ltd but, in the end, it had to get sorted so I signed up for umbrella for now.

Still hoping I can get something sorted though for next extension. Any suggestions?

Does your accountant not run your payroll for you for Ltd. contracts? Or do you not take a salary? No reason they could not do it once you give them the relevant info. Provided the correct Tax NI is paid HMRC don't care who does it. You could even do it yourself i you felt so inclined.

northernladuk
18th April 2017, 08:57
What makes you think they'll change their stance come renewal?

TheFaQQer
18th April 2017, 08:58
If only this kind of thing had been mentioned in an FAQ somewhere...

So what you are after is to pay someone else to do the payroll and calculations - the agency pays them gross, they do the calculations and pass the net payment to you and the rest of the money to HMRC. Someone has to deduct that money from the gross invoice or you're breaking the law.

So what you're looking for is an umbrella company that allows you to use your limited company and gives you less benefits and fewer opportunities to make any kind of tax saving :freaky:

psychocandy
18th April 2017, 09:14
If only this kind of thing had been mentioned in an FAQ somewhere...

So what you are after is to pay someone else to do the payroll and calculations - the agency pays them gross, they do the calculations and pass the net payment to you and the rest of the money to HMRC. Someone has to deduct that money from the gross invoice or you're breaking the law.

So what you're looking for is an umbrella company that allows you to use your limited company and gives you less benefits and fewer opportunities to make any kind of tax saving :freaky:

Yes already read that....

Hobosapien
18th April 2017, 12:51
Does your accountant not run your payroll for you for Ltd. contracts? Or do you not take a salary? No reason they could not do it once you give them the relevant info. Provided the correct Tax NI is paid HMRC don't care who does it. You could even do it yourself i you felt so inclined.


Is it down to whether the agency (who as engager, if I understand things correctly, is legally obliged to ensure the correct tax is being paid under the new rules) will accept offloading it to the Ltd's accountant rather than take the easy option of attempting to force the contractor via their own preferred method (e.g. umbrella that may or may not be 'doing a deal' with the agency to get all the business)?

TheFaQQer
18th April 2017, 13:01
Is it down to whether the agency (who as engager, if I understand things correctly, is legally obliged to ensure the correct tax is being paid under the new rules) will accept offloading it to the Ltd's accountant rather than take the easy option of attempting to force the contractor via their own preferred method (e.g. umbrella that may or may not be 'doing a deal' with the agency to get all the business)?

Inside IR35 in public sector, the fee payer must make the calculation and deduct the tax before paying net to the contractor.

Which is why trying to involve a payroll company is just stupid because you're going to pay someone else to receive the gross amount from the agent / client, calculate and deduct the tax and pay the net amount to your company. Kind of like an umbrella really, but paying the limited company rather than the individual - it adds no benefit.

Hobosapien
18th April 2017, 13:19
Inside IR35 in public sector, the fee payer must make the calculation and deduct the tax before paying net to the contractor.

Which is why trying to involve a payroll company is just stupid because you're going to pay someone else to receive the gross amount from the agent / client, calculate and deduct the tax and pay the net amount to your company. Kind of like an umbrella really, but paying the limited company rather than the individual - it adds no benefit.


I find it interesting as I am already paying my accountant to handle payroll for the quarterly RTI aspect that HMRC require, so in theory my accountant could handle this at no or little extra cost instead of using a brolly if the agency accepted it and I was sure I wanted to continue contracting via my LTD for the contract.

Just something else for me to look into if I go down the 'return to public sector inside IR35' path.

TheFaQQer
18th April 2017, 13:25
I find it interesting as I am already paying my accountant to handle payroll for the quarterly RTI aspect that HMRC require, so in theory my accountant could handle this at no or little extra cost instead of using a brolly if the agency accepted it and I was sure I wanted to continue contracting via my LTD for the contract.

Just something else for me to look into if I go down the 'return to public sector inside IR35' path.

Your accountant can only do it if they become the fee payer, with a contract between them and the agency / client. That means that they have to accept the liability for the person making the assessment of your IR35 status getting it right.

Which isn't going to happen. If you want to use your own limited (and I would really question why that would make sense) then you need to persuade the agency to deal with your company - some agencies will be willing to do that, but as I wrote in the FAQ I suspect that many will not want that hassle for the (utter lack of) benefit that they would get from the arrangement.

b r
19th April 2017, 07:56
Which isn't going to happen. If you want to use your own limited (and I would really question why that would make sense) then you need to persuade the agency to deal with your company - some agencies will be willing to do that, but as I wrote in the FAQ I suspect that many will not want that hassle for the (utter lack of) benefit that they would get from the arrangement.

I'm slightly confused.

The PS (or their agency) pays your Limited Company invoice net of taxes/NI etc - that is their statutory role, and they also inform HMRC via RTI.

You then pay yourself this net figure and stick it into your accounts/spreadsheet.

At year-end your Accountant (or you) completes a self-assessment and sends off to HMRC.

Or am I totally wrong?

psychocandy
19th April 2017, 08:06
Inside IR35 in public sector, the fee payer must make the calculation and deduct the tax before paying net to the contractor.

Which is why trying to involve a payroll company is just stupid because you're going to pay someone else to receive the gross amount from the agent / client, calculate and deduct the tax and pay the net amount to your company. Kind of like an umbrella really, but paying the limited company rather than the individual - it adds no benefit.

But agency, at the moment (rightly or wrongly) are refusing to do this. Assume they are allowed to do this - i.e. they offer the business and this is the way they will agree to do it.

Their stance is umbrella or payroll company.....

Andy Hallett
19th April 2017, 08:18
Does your accountant not run your payroll for you for Ltd. contracts? Or do you not take a salary? No reason they could not do it once you give them the relevant info. Provided the correct Tax NI is paid HMRC don't care who does it. You could even do it yourself i you felt so inclined.

The recent legislation is the reason


Inside IR35 in public sector, the fee payer must make the calculation and deduct the tax before paying net to the contractor.

Correct


But agency, at the moment (rightly or wrongly) are refusing to do this. Assume they are allowed to do this - i.e. they offer the business and this is the way they will agree to do it.

Their stance is umbrella or payroll company.....

We've heard this about quite a few agencies, and it was something we considered doing as well.

However, based upon feedback from our contractors, we took the decision that we would still pay PSCs 'Inside IR35'. About 25% of our Public Sector runners who have been determined inside are now using this mechanism.

The Spartan
19th April 2017, 08:29
What makes you think they'll change their stance come renewal?

WNLUKS ^^

From previously working there as a permie I know full well how contractors operate there and let's just say they should have all been within IR35.

I can't see that much would've changed between then and now.

TheFaQQer
19th April 2017, 09:33
I'm slightly confused.

The PS (or their agency) pays your Limited Company invoice net of taxes/NI etc - that is their statutory role, and they also inform HMRC via RTI.

You then pay yourself this net figure and stick it into your accounts/spreadsheet.

At year-end your Accountant (or you) completes a self-assessment and sends off to HMRC.

Or am I totally wrong?

You are right.

LoughriggFell
19th April 2017, 10:11
Does your accountant not run your payroll for you for Ltd. contracts? Or do you not take a salary? No reason they could not do it once you give them the relevant info. Provided the correct Tax NI is paid HMRC don't care who does it. You could even do it yourself i you felt so inclined.


This was something my accountant looked into offering, but decided against. Wasn't worth the effort, and also agencies having their 'preferred' umbrella companies, potentially not being happy to work with individual accountants.

psychocandy
19th April 2017, 10:35
The recent legislation is the reason



Correct



We've heard this about quite a few agencies, and it was something we considered doing as well.

However, based upon feedback from our contractors, we took the decision that we would still pay PSCs 'Inside IR35'. About 25% of our Public Sector runners who have been determined inside are now using this mechanism.

So it has got to be the agency that does the tax/NI thing. So they are quite within their rights to refuse to operate like this?

BTW -remind me which agencies you represent?

psychocandy
19th April 2017, 10:45
WNLUKS ^^

From previously working there as a permie I know full well how contractors operate there and let's just say they should have all been within IR35.

I can't see that much would've changed between then and now.

LOL. Same in a lot of places. I don't think this client is unique in that - its always been a grey area for a lot of people. I will admit that.

Apparently, in this case, the one question that killed it was - would a contractor fix at their own expense? They said no we'd pay them to come in. Strange thing to say.

Even in other BAU type clients if things have gone wrong and its been something I did, I'd make a point of sorting it myself and not claiming any extra time.

Appreciate there are tons of grey areas with things like this at a LOT of clients. You could answer a lot of these questions either way I think. Just a bit surprised that they didn't appear to consider this.

northernladuk
19th April 2017, 10:54
LOL. Same in a lot of places. I don't think this client is unique in that - its always been a grey area for a lot of people. I will admit that.

Apparently, in this case, the one question that killed it was - would a contractor fix at their own expense? They said no we'd pay them to come in. Strange thing to say.

Even in other BAU type clients if things have gone wrong and its been something I did, I'd make a point of sorting it myself and not claiming any extra time.

Appreciate there are tons of grey areas with things like this at a LOT of clients. You could answer a lot of these questions either way I think. Just a bit surprised that they didn't appear to consider this.

I don't think this is true. I've yet to see a client that makes contractors fix stuff in their own time. It's part of the job to them. You code something wrong, send docs for review with mistakes, it goes through the process, comes back, gets corrected and through the process again. Part of the daily job. It's not a strange thing to say if they see it as part of the job at all.

I very much doubt you'd do any work in your own time, your fault or not. And even if you do client will see it as a bit of above and beyond and not you fixing it in your own time.

If you were the type that does extra time regularly you could try educate your client that's the time you do the fixes and it's your time but you'd have to be in the gig for that so no help when making the initial determination.

psychocandy
19th April 2017, 11:03
I don't think this is true. I've yet to see a client that makes contractors fix stuff in their own time. It's part of the job to them. You code something wrong, send docs for review with mistakes, it goes through the process, comes back, gets corrected and through the process again. Part of the daily job. It's not a strange thing to say if they see it as part of the job at all.

I very much doubt you'd do any work in your own time, your fault or not. And even if you do client will see it as a bit of above and beyond and not you fixing it in your own time.

If you were the type that does extra time regularly you could try educate your client that's the time you do the fixes and it's your time but you'd have to be in the gig for that so no help when making the initial determination.

Know what you mean - clients tend not to understand the issues.

The Spartan
19th April 2017, 11:04
LOL. Same in a lot of places. I don't think this client is unique in that - its always been a grey area for a lot of people. I will admit that.

Apparently, in this case, the one question that killed it was - would a contractor fix at their own expense? They said no we'd pay them to come in. Strange thing to say.

Even in other BAU type clients if things have gone wrong and its been something I did, I'd make a point of sorting it myself and not claiming any extra time.

Appreciate there are tons of grey areas with things like this at a LOT of clients. You could answer a lot of these questions either way I think. Just a bit surprised that they didn't appear to consider this.

LOL Behave the the only thing that's grey there it the career civil serpents that work there, don't forget that one of my best mates left there recently and while he was there they did everything they possibly could to keep him. Ultimately while he was there he took every precaution necessary to ensure it was outside IR35. We used to have daily conversations on Slack about how he had to refuse to do certain work as it was outside the scope of his contract.

northernladuk
19th April 2017, 11:05
Know what you mean - clients tend not to understand the issues.

I don't think many contractors do in this area either. We'd certainly hear about it if you went for an interview and the client told you that you'd be fixing your mistakes in your own time!

TheFaQQer
19th April 2017, 11:17
So it has got to be the agency that does the tax/NI thing

It has to be the fee payer - the law is quite clear on this.

If you are direct, that's the client.

If you are via an agency and there are no other companies in the mix, it's the agency.

If you are via an agency and there are other companies in the chain, then it's the company closest to the intermediary that is used by the individual (eg a payroll company paying your limited company).

Fee payer = the company that pays the fees to your company.

If you use an umbrella company then this is all irrelevant.

psychocandy
19th April 2017, 12:50
LOL Behave the the only thing that's grey there it the career civil serpents that work there, don't forget that one of my best mates left there recently and while he was there they did everything they possibly could to keep him. Ultimately while he was there he took every precaution necessary to ensure it was outside IR35. We used to have daily conversations on Slack about how he had to refuse to do certain work as it was outside the scope of his contract.

Ha ha. Know what you mean but its no dissimilar to a lot of places lol.

psychocandy
19th April 2017, 12:52
I don't think many contractors do in this area either. We'd certainly hear about it if you went for an interview and the client told you that you'd be fixing your mistakes in your own time!

Maybe lol. But at last client I did. They were a bit bemused that I did but didn't moan. (Deleted the wrong Exchange DBs so had to rebuild a few from primary copy - not hard but time consuming).

psychocandy
19th April 2017, 12:52
It has to be the fee payer - the law is quite clear on this.

If you are direct, that's the client.

If you are via an agency and there are no other companies in the mix, it's the agency.

If you are via an agency and there are other companies in the chain, then it's the company closest to the intermediary that is used by the individual (eg a payroll company paying your limited company).

Fee payer = the company that pays the fees to your company.

If you use an umbrella company then this is all irrelevant.

But if agency says nah we ain't doing it? Too much hassle....

Andy Hallett
19th April 2017, 13:57
So it has got to be the agency that does the tax/NI thing. So they are quite within their rights to refuse to operate like this?

BTW -remind me which agencies you represent?

Yes & In the UK:

Computer Futures
Real Staffing
Huxley Associates
Progressive
Orgtel
Hyden

Andy Hallett
19th April 2017, 13:57
But if agency says nah we ain't doing it? Too much hassle....

Choose another agency....

northernladuk
19th April 2017, 15:04
Article on the CUK main pages relating to this...

Contractors' Questions: Can agencies block PSCs from public contracts? :: Contractor UK (http://www.contractoruk.com/public_sector_contracting/contractors_questions_can_agencies_block_pscs_publ ic_contracts.html)

TheFaQQer
19th April 2017, 15:37
Article on the CUK main pages relating to this...

Contractors' Questions: Can agencies block PSCs from public contracts? :: Contractor UK (http://www.contractoruk.com/public_sector_contracting/contractors_questions_can_agencies_block_pscs_publ ic_contracts.html)

I think she's stolen that answer from my FAQ :tantrum:

northernladuk
19th April 2017, 15:45
I think she's stolen that answer from my FAQ :tantrum:

That's exactly what I thought... ;)

psychocandy
19th April 2017, 15:47
Choose another agency....

Not one of yours. :-) Wish I could....