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Employers NI post April 2020

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    #11
    Originally posted by Hobosapien View Post
    It will be interesting to see how agencies handle the advertising of inside IR35 contract vacancies and associated rates.
    'Market' or 'Competitive' rates, one would assume?

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      #12
      Originally posted by Hobosapien View Post
      It will be interesting to see how agencies handle the advertising of inside IR35 contract vacancies and associated rates.

      Currently the rate advertised is the gross rate unless agency operates PAYE, as the rate paid is to the fee payer (payroll or brolly that handles paying the contractor net of taxes) so includes NI and everything else, the rate is the rate that the client is willing to pay less the agency's cut.

      Hopefully it will continue like that where the agency is offering the contract without payroll so the rate is the gross rate that needs breaking down when the fee payer determines how to deduct due taxes. Otherwise expect some confusion and mishandling by agencies that get mixed up over inside and outside IR35 contract rate handling.

      It will be important to clarify exactly what the rate entails before accepting it.

      I think it's unlikely you'll see Limited (Inside) rates. More likely to be a mix of Umbrella/PAYE/Limited(Outside). The requirement for Agencies to issue KIDS from next April will have an impact. This requires a breakdown on actual net pay prior to offer so will force Agencies to be clearer on PAYE + Costs for umbrella.

      It's actually quite difficult to do - Employer NI (for example) varies based on overall earnings so using a blunt 13.8% on every £1 earned leaves more in the pot than is paid for ERNI.

      If you advertise a gross rate as £25 inclusive of employer costs that ensures that everything that is not paid over to HMRC is paid to the contractor. If you're forced to advertise as £18 + Employer costs it means you only get £18 even in the event you opt out of pension, don't hit the LEL for ERNI etc.

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