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Under IR35 - Capita is charging me Apprenticeship Levy Tax

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    Under IR35 - Capita is charging me Apprenticeship Levy Tax

    I'm a contractor working for a goverment agency and Capita is handling my billing. I've been forced under IR35. Capita is now taking out of my day rate the apprentiship levy tax at .5%. This is only required by companies with a payroll over 3million. My company does not have a payroll of over 3m, So this must be Capitas Tax. Is this even legal to pass on a tax? they say it is a ccs policy that I pay for Capita's tax? I also don't get any of the benefits or rebates.

    #2
    Originally posted by nelsonswork View Post
    I'm a contractor working for a goverment agency and Capita is handling my billing. I've been forced under IR35. Capita is now taking out of my day rate the apprentiship levy tax at .5%. This is only required by companies with a payroll over 3million. My company does not have a payroll of over 3m, So this must be Capitas Tax. Is this even legal to pass on a tax? they say it is a ccs policy that I pay for Capita's tax? I also don't get any of the benefits or rebates.
    What does your contract say?

    Comment


      #3
      Capita, as your faux employer, has a turnover that means the levy is chargeable. Whether they pay it, you pay it, or the PSB pays it depends on your contract.

      BTW - your post implies you are putting the invoicing/receipts through your Ltd Co. How are you accounting for the VAT discrepancy between what you charge and what you receive? I asked my accountant and he didn't know!

      Comment


        #4
        First question who is paying you personally... To answer your question we need to know the contract hierarchy:-

        public sector client -> Capita -> ???? -> ???? (either your company / umbrella) --> you

        only then can we work out what is happening and whether the deduction is valid or not...
        merely at clientco for the entertainment

        Comment


          #5
          Why is this thread in General?
          "You’re just a bad memory who doesn’t know when to go away" JR

          Comment


            #6
            Originally posted by ladymuck View Post
            Capita, as your faux employer, has a turnover that means the levy is chargeable. Whether they pay it, you pay it, or the PSB pays it depends on your contract.

            BTW - your post implies you are putting the invoicing/receipts through your Ltd Co. How are you accounting for the VAT discrepancy between what you charge and what you receive? I asked my accountant and he didn't know!
            There is no VAT discrepancy -> you bill £2000 with £400 VAT on top and you receive £400 in VAT.

            The issue is that you don't receive £2000 in payment alongside that £400 in VAT. You only get £1200 of it (rough guesstimate figure) with the rest withhold or paid on your behalf by the agency....
            merely at clientco for the entertainment

            Comment


              #7
              Originally posted by nelsonswork View Post
              Is this even legal to pass on a tax?
              It's legal as long as it is agreed between all parties - they cannot just add an extra charge to you without it being agreed in your contract though.

              One of the schools that I am involved with has had to add a line in the budget this year to account for it, even though "our" payroll bill is significantly less than the £3m turnover. One of the other schools that I am involved with does not because it is being paid for by another entity instead of the individual school. Both are legal because of the contractual arrangements.
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              Comment


                #8
                Originally posted by SueEllen View Post
                Why is this thread in General?
                Due to the Chutney Spoon Levy.

                Comment


                  #9
                  Originally posted by eek View Post
                  There is no VAT discrepancy -> you bill £2000 with £400 VAT on top and you receive £400 in VAT.

                  The issue is that you don't receive £2000 in payment alongside that £400 in VAT. You only get £1200 of it (rough guesstimate figure) with the rest withhold or paid on your behalf by the agency....
                  Ah...ok. That makes sense. Thank you

                  Time to change accountants.

                  Comment


                    #10
                    Originally posted by SueEllen View Post
                    Why is this thread in General?
                    Cause people are lazy.
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

                    Comment

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