Gerry M on VAT & IR35 Gerry M on VAT & IR35
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  1. #1

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    Default Gerry M on VAT & IR35

    ...my quagmire of greed....my cesspit of laziness and unfairness....all I am doing is sticking two fingers up at nurses, doctors and other hard working employed professionals...

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    In short...HMRC have given the green light for banks and other big financial firms to blanket everyone inside and pocket the VAT. The contractors will take home significantly less for their efforts and expertise and HMRC shot themselves in the foot as the take home will now generate far less for HMRC to tax.

    So...well done HMRC (again). You've made these big firms screw the little guys

  3. #3

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    Quote Originally Posted by Anubis View Post
    In short...HMRC have given the green light for banks and other big financial firms to blanket everyone inside and pocket the VAT. The contractors will take home significantly less for their efforts and expertise and HMRC shot themselves in the foot as the take home will now generate far less for HMRC to tax.

    So...well done HMRC (again). You've made these big firms screw the little guys
    TBF. HMRC have let the consultancies bugger them from behind yet again. Well played Sir Humphrey.
    ---

    Former member of IPSE.

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    Quote Originally Posted by Anubis View Post
    In short...HMRC have given the green light for banks and other big financial firms to blanket everyone inside and pocket the VAT. The contractors will take home significantly less for their efforts and expertise and HMRC shot themselves in the foot as the take home will now generate far less for HMRC to tax.

    So...well done HMRC (again). You've made these big firms screw the little guys
    If the article is accurate - it does need to be shouted.
    ...my quagmire of greed....my cesspit of laziness and unfairness....all I am doing is sticking two fingers up at nurses, doctors and other hard working employed professionals...

  5. #5

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    This doesn't make any sense. The end client now just pays the VAT to the Umbrella company rather than the LtdCo. The client is still paying unreclaimable VAT, it's just that now it's going to HMRC via the Umbrella, rather than via the LtdCo.

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    Look at the first post. This is Gerry McLaughing. Probably best ignored.
    Blog? What blog...?

  7. #7

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    Never heard of him. Seems like that's just as well.

  8. #8

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    Quote Originally Posted by Amanensia View Post
    This doesn't make any sense. The end client now just pays the VAT to the Umbrella company rather than the LtdCo. The client is still paying unreclaimable VAT, it's just that now it's going to HMRC via the Umbrella, rather than via the LtdCo.
    This. Article is total bollox.

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    He seems to have found a spellchecker that works this time (admittedly only spent 30 secs scanning the article)

  10. #10

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    Quote Originally Posted by Lockhouse View Post
    It is true that financial institutions don't charge VAT to their customers and so any VAT charged to them is a cost that they won't have to bear if they cease to engage contingent workers through intermediaries. What that article doesn't then consider is that those banks are likely to incur costs for absence through sickness and annual leave, for pension contributions and apprenticeship levy and for training and other staff welfare/development related matters.

    The actual net position is not likely to see the banks slinking off into the shadows with a swag bag slung over their shoulders, although they may see some small financial benefit, at least in the short term.

    The reality is that banks are extremely risk-averse and are displaying similar behaviours to those exhibited by various government bodies in 2017. We are seeing this behaviour earlier and it is not outside the realms of possibility that this will change with time and a realisation that they can't deliver projects without having access to a contingent workforce.

    The article also states that these financial institutions should have contractors sit HMRC status assessment test (CEST) and that this is guaranteed by HMRC.

    Firstly, CEST is a biased test and is not fit for purpose. It ignores MOO which through legal precedent is one of the irreducible minimum of three things that must be present to prove an employment status.

    Secondly, HMRC will not guarantee to stand by the results of this test. Their statement is caveated with a clause that states they will only stand by the result if the information entered was accurate and true AND they actually tried to have the results disregarded in a case at Tribunal this year when they claimed the CEST outcome was "irrelevant".

    Articles like this are unhelpful and misleading. There are plenty of IR35 specialists out there who can help with IR35 advice (pre and post reform) and it would be wise to engage with one of these for help navigating this period of uncertainty.

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