IR35 Agency rate breakdown

**northernladuk** · 4 February 2020, 14:08

Are you absolutely sure it will be paid to LTD. This is the second time we've heard this this week but never before and ti's against what we thought would happen.

It's been taxed and is net so no reason to be paid to you personally so why the LTDs suddenly being allowed?

**JPC** · 4 February 2020, 14:15

Originally posted by northernladuk View Post

Are you absolutely sure it will be paid to LTD. This is the second time we've heard this this week but never before and ti's against what we thought would happen.

It's been taxed and is net so no reason to be paid to you personally so why the LTDs suddenly being allowed?

I don't know surely i was expecting 400 i then pay the NI and TAX as per ir35 for single person operating LTD company?

She did ask me are you Umbrella or LTD said not sure maybe LTD.

What do i ask the agency to check im not sure here.

**Liberator** · 4 February 2020, 14:16

Originally posted by JPC View Post

First of all sorry i read the sticky on this and i am still not clear.

Also may i add i don't know how IR35 has been allowed to proceed why are the savage dogs being allowed here.

That aside i was offered a new contract role which was deemed inside the 'we bully anyone who tries to be tax efficient but shy away from the big men' IR35.

I requested a 400/day rate but then received this mail im already 50quid down is this right?

INPUT CURRENT LTD RATE £400.00
Employers NI £48.29
Apprenticeship Levy £1.76

THIS IS THE NEW DEEMED PAY RATE £349.95

The £349.95 will then be subject to tax and national insurance and you will receive a net salary into your LTD company

This sounds about right. Similar to mine. Not sure why it's being paid to your Ltd. though as has been said.

**eatenrifles** · 4 February 2020, 14:17

Originally posted by northernladuk View Post

Are you absolutely sure it will be paid to LTD. This is the second time we've heard this this week but never before and ti's against what we thought would happen.

My agency will pay net to Ltd. if I wish. Can't see the point, but they'll do it if I want.

**jamesbrown** · 4 February 2020, 14:30

Originally posted by northernladuk View Post

ti's against what we thought would happen

I don't really get the confusion around this.

It's precisely what the legislation expects to happen.

Sure, we could've predicted that most clients and fee payers wouldn't want to bother with the faff, but this situation is literally the core of what the legislation intended.

**IRMe** · 4 February 2020, 14:32

Originally posted by northernladuk View Post

Are you absolutely sure it will be paid to LTD. This is the second time we've heard this this week but never before and ti's against what we thought would happen.

It's been taxed and is net so no reason to be paid to you personally so why the LTDs suddenly being allowed?

For what it's worth NLUK HMRC's view operating through a PSC as an option and provide info on how salary and dividends would be paid:

DRAFT off-payroll working legislation: Chapter 10, ITEPA 2003 (from 6 April 2020): basic principles: how the worker accounts for and reports monies drawn from their intermediary
This is a draft and may be subject to change

Where the worker draws remuneration or dividends from their PSC, this approach can be used to report information for tax and NICs purposes. The worker’s intermediary (e.g. the PSC) will need relief against its payroll liability if Chapter 10 ITEPA 2003 / Part 2 SSCIR 2000 have been applied.

https://www.gov.uk/hmrc-internal-manuals/employment-status-manual/esm10030]Draft ESM 10030[/url]

I guess using your PSC as the intermediary is an option, if your client allows, although many seem to be going brolly only.

**JPC** · 4 February 2020, 14:48

OK this is the response i recived

The rate is at £400 per day, however as this is inside IR35. When working through your Ltd company, this will be on a deemed bases. Meaning employers and employees NI and tax will need to be paid at source

The break down below shows employers NI being deducted, due to everyone’s tax code being different, we are unable to work out the accurate rate after this has been deducted

So is there any point in me having a LTD company?

Do i just take it up the tuliptah and go umbrella as HMRC has dictated to us minions? (who would paradoxically not exist if it wasn't for us working and creating an economy in the first place)

**jamesbrown** · 4 February 2020, 14:52

Originally posted by JPC View Post

So is there any point in me having a LTD company?

Do i just take it up the tuliptah and go umbrella as HMRC has dictated to us minions? (who would paradoxically not exist if it wasn't for us working and creating an economy in the first place)

Nope, not really, unless you have other work that is outside.

But this is literally how the legislation is supposed to work w/r to deemed payments.

Anyway, in the vast majority of cases, an umbrella is going to make more sense. No deemed payments, just actual payments to an (umbrella) employee.

**JPC** · 4 February 2020, 15:01

Originally posted by jamesbrown View Post

Nope, not really, unless you have other work that is outside.

But this is literally how the legislation is supposed to work w/r to deemed payments.

Anyway, in the vast majority of cases, an umbrella is going to make more sense. No deemed payments, just actual payments to an (umbrella) employee.

Ok thanks to you and the others here responding so quickly, greatly appreciate your time and knowledge.

In the meantime i am going to step up the campaign here IR35 is 100% wrong im happy to go this route as long as im paid holiday and sick pay like every other person paying the same tax an NI rate.

IR35 Agency rate breakdown