Originally posted by m0n1k3r
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Agency up front about IR35 status
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Originally posted by eek View PostThat was banned back in the 70's due to Agencies abusing self-employment.First they ignore you, then they laugh at you, then they fight you, then you win. But Gandhi never had to deal with HMRCComment
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Originally posted by RonBW View PostWas it banned? I thought that it was just that legislation was introduced which meant that if you didn't pay the right tax the agency became liable for it and so the agency would generally now by custom refuse to engage a self employed worker.
Do contractors need limited companies? :: Contractor UKComment
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Good explanation here
Do contractors need limited companies? :: Contractor UK
"Up until the mid 1970s many contractors provided their services as self-employed workers taxed under Schedule D. Then came S38 of the Finance (No 2) Act 1975 which provided that individual contractors who contracted with agencies would, under certain conditions, be subject to PAYE and tax under Schedule E. As a result most contractors who used agencies formed their own limited companies so that it was their company rather than themselves individually which then contracted with the agency, and thus the application of S38 was avoided. Although S38 of the Finance (no 2) Act 1975, which is now S134 of the Income and Corporation Taxes Act 1988, never applied to all individual contractors (i.e. non-limited company contractors) who used agencies, in practice it was in the agencies' interest to assume that it did and to apply PAYE across the board unless a limited company was used. It was also extremely difficult for the contractor to challenge this. Recent legislation has, however, changed the situation so that contracting direct with an agency (without a limited company) and being taxed under Schedule D is now again a practical possibility for some contractors, including for some contractors who, if they contracted using a limited company, would come within IR35."
So not banned as such, but made impractical.
If you're contracting direct, and the client is happy, it is still possible to be SchedD self employed.Comment
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Originally posted by teapot418 View PostGood explanation here
Do contractors need limited companies? :: Contractor UK
"Up until the mid 1970s many contractors provided their services as self-employed workers taxed under Schedule D. Then came S38 of the Finance (No 2) Act 1975 which provided that individual contractors who contracted with agencies would, under certain conditions, be subject to PAYE and tax under Schedule E. As a result most contractors who used agencies formed their own limited companies so that it was their company rather than themselves individually which then contracted with the agency, and thus the application of S38 was avoided. Although S38 of the Finance (no 2) Act 1975, which is now S134 of the Income and Corporation Taxes Act 1988, never applied to all individual contractors (i.e. non-limited company contractors) who used agencies, in practice it was in the agencies' interest to assume that it did and to apply PAYE across the board unless a limited company was used. It was also extremely difficult for the contractor to challenge this. Recent legislation has, however, changed the situation so that contracting direct with an agency (without a limited company) and being taxed under Schedule D is now again a practical possibility for some contractors, including for some contractors who, if they contracted using a limited company, would come within IR35."
So not banned as such, but made impractical.
If you're contracting direct, and the client is happy, it is still possible to be SchedD self employed.
True there are exceptions if you go direct but equally its a very limited part of the market and you are usually better off using a limited company...merely at clientco for the entertainmentComment
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Originally posted by jamesbrown View PostI think that's what eek means. A long and boring (depending on your persuasion) history can be found here:
Do contractors need limited companies? :: Contractor UKComment
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Originally posted by teapot418 View PostOr what jb said (again!)First they ignore you, then they laugh at you, then they fight you, then you win. But Gandhi never had to deal with HMRCComment
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Originally posted by RonBW View PostYou are James Brown and I claim my five pounds.Comment
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Originally posted by jamesbrown View PostI don't know about you, but I'm RonBW. Eek is the only non-sockie in this entire thread....I like talking to myself.... and so do Imerely at clientco for the entertainmentComment
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Thursday...
So I read on Linkedin that this Thursday HMRC will release the most anticipated tool...Comment
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