Discussion
Eric Mc said:
I give way too much free advice on this forum.
What I am pointing out to you is that to use a rather simplistic piece of software on HMRC's own website is naive in the extreme - and could work out very expensive for you.
Read up on this case to see what happens when a person thought he had done all the "HMRC advised" things to check his IR35 status - and then failed when HMRC did their own checks on the situation.
http://www.contractoruk.com/ir35/why_dragonfly_got...
All well and good, but from April it's of little point using any of those tools as it's no longer your decision, or indeed the agency's. If the public sector department says it's in ... its in and the engaging agency markets the role thus.What I am pointing out to you is that to use a rather simplistic piece of software on HMRC's own website is naive in the extreme - and could work out very expensive for you.
Read up on this case to see what happens when a person thought he had done all the "HMRC advised" things to check his IR35 status - and then failed when HMRC did their own checks on the situation.
http://www.contractoruk.com/ir35/why_dragonfly_got...
arfur said:
Eric Mc said:
I give way too much free advice on this forum.
What I am pointing out to you is that to use a rather simplistic piece of software on HMRC's own website is naive in the extreme - and could work out very expensive for you.
Read up on this case to see what happens when a person thought he had done all the "HMRC advised" things to check his IR35 status - and then failed when HMRC did their own checks on the situation.
http://www.contractoruk.com/ir35/why_dragonfly_got...
All well and good, but from April it's of little point using any of those tools as it's no longer your decision, or indeed the agency's. If the public sector department says it's in ... its in and the engaging agency markets the role thus.What I am pointing out to you is that to use a rather simplistic piece of software on HMRC's own website is naive in the extreme - and could work out very expensive for you.
Read up on this case to see what happens when a person thought he had done all the "HMRC advised" things to check his IR35 status - and then failed when HMRC did their own checks on the situation.
http://www.contractoruk.com/ir35/why_dragonfly_got...
alfie2244 said:
arfur said:
Eric Mc said:
I give way too much free advice on this forum.
What I am pointing out to you is that to use a rather simplistic piece of software on HMRC's own website is naive in the extreme - and could work out very expensive for you.
Read up on this case to see what happens when a person thought he had done all the "HMRC advised" things to check his IR35 status - and then failed when HMRC did their own checks on the situation.
http://www.contractoruk.com/ir35/why_dragonfly_got...
All well and good, but from April it's of little point using any of those tools as it's no longer your decision, or indeed the agency's. If the public sector department says it's in ... its in and the engaging agency markets the role thus.What I am pointing out to you is that to use a rather simplistic piece of software on HMRC's own website is naive in the extreme - and could work out very expensive for you.
Read up on this case to see what happens when a person thought he had done all the "HMRC advised" things to check his IR35 status - and then failed when HMRC did their own checks on the situation.
http://www.contractoruk.com/ir35/why_dragonfly_got...
I've a holiday booked to bugger off somewhere hot on the 1st April for a well earned break.
daemon said:
Yup. I have my resign date calculated out to work my weeks notice, get paid the following week and be off their books before 5th April. (Actually by 31st March)
I've a holiday booked to bugger off somewhere hot on the 1st April for a well earned break.
We turned a Private sector contract down last week due to being fully engaged in PSB contracts, one of which has just asked to extend for a 2nd time. (Currently due to expire mid May)I've a holiday booked to bugger off somewhere hot on the 1st April for a well earned break.
We have declined to extend due to the PSB not yet being able decide whether the contract falls within IR35 in their opinion, the middleman agency trying to maneuver us into an umbrella company and our concerns of not wishing to fall foul of IR35 rules..........we will probably soon be issuing a 28 day termination letter to finish and be paid by April 5th instead.
alfie2244 said:
daemon said:
Yup. I have my resign date calculated out to work my weeks notice, get paid the following week and be off their books before 5th April. (Actually by 31st March)
I've a holiday booked to bugger off somewhere hot on the 1st April for a well earned break.
We turned a Private sector contract down last week due to being fully engaged in PSB contracts, one of which has just asked to extend for a 2nd time. (Currently due to expire mid May)I've a holiday booked to bugger off somewhere hot on the 1st April for a well earned break.
We have declined to extend due to the PSB not yet being able decide whether the contract falls within IR35 in their opinion, the middleman agency trying to maneuver us into an umbrella company and our concerns of not wishing to fall foul of IR35 rules..........we will probably soon be issuing a 28 day termination letter to finish and be paid by April 5th instead.
daemon said:
alfie2244 said:
daemon said:
Yup. I have my resign date calculated out to work my weeks notice, get paid the following week and be off their books before 5th April. (Actually by 31st March)
I've a holiday booked to bugger off somewhere hot on the 1st April for a well earned break.
We turned a Private sector contract down last week due to being fully engaged in PSB contracts, one of which has just asked to extend for a 2nd time. (Currently due to expire mid May)I've a holiday booked to bugger off somewhere hot on the 1st April for a well earned break.
We have declined to extend due to the PSB not yet being able decide whether the contract falls within IR35 in their opinion, the middleman agency trying to maneuver us into an umbrella company and our concerns of not wishing to fall foul of IR35 rules..........we will probably soon be issuing a 28 day termination letter to finish and be paid by April 5th instead.
Best get down to boat and get ready for the spring cruise
alfie2244 said:
The PSBs we are working for are all but begging us to continue..the reason they use us is they can't get PAYE people..go figure.
Best get down to boat and get ready for the spring cruise
Where i am are still at the arrogant denial stage - "they'll just have to tow the line and accept they're within IR35", "they've no choice but to stay here". We're referred to as the "hired help" in management meetings. Best get down to boat and get ready for the spring cruise
I dont think they'll twig until we're gone just what the impact is.
alfie2244 said:
Little update....this test asked more detailed questions and gave a solid pass.
https://www.ir35testing.co.uk/
That test has nothing to do with HMRC! https://www.ir35testing.co.uk/
Petition - Scrap IR35 legislation reform proposals for public sector off-payroll workers
Clearly written by a civil servant in the Treasury. This is almost word-for-word the same response I received when I wrote to my MP.
Clearly written by a civil servant in the Treasury. This is almost word-for-word the same response I received when I wrote to my MP.
Government Response said:
Reforming the off-payroll working rules in the public sector will ensure that all public sector bodies, and those who work for them, pay the right amount of tax.
The off-payroll working rules, commonly known as IR35, are in place to ensure that where individuals would have been employees if they were providing their services directly, they pay broadly the same tax and National Insurance as other employees. However, the Government estimates that currently only around 10% of people who should pay tax on at least part of their company's income under these rules actually do so. This non-compliance is unfair, and the most recent estimate puts the cost to the Exchequer at £440m per year which, in turn, reduces the government’s ability to fund core services used by all such as the NHS.
There are many legitimate, commercial reasons for people to work through limited companies and for businesses to engage individuals in this way. The Government recognises the benefits to the economy of having a flexible labour market, and has no intention of preventing people from working through their own companies. However, the Government does not believe that an individual’s decision to work through a company should necessarily affect the amount of tax that they pay when they are remunerated for their work.
The Government considers it crucial that public sector bodies make sure that both they and those who work for them pay the right amount of tax. As such, the Government is taking action to improve compliance with the rules in the public sector. From April 2017, individuals working through their own company in the public sector will no longer be responsible for operating the off-payroll rules. Where an individual’s company is directly engaged to a public sector body, the public sector body will be responsible for determining whether or not the rules apply, and deducting any necessary employment taxes on payments to the individual’s company. Where this engagement takes place through an agency, the public sector body will be responsible for determining whether or not the rules apply and informing the agency of this decision, in order that any necessary employment taxes can be deducted by the agency.
It’s important to note that this change does not introduce a new liability, but is designed to ensure that the current rules work as intended. Legislation to stop individuals reducing their tax bill by working through a limited company has been in place for more than 15 years. Furthermore, these rules will not lead to self-employed individuals paying employment taxes; the rules only apply to those who would have been employed if they were engaged directly. Indeed, many public sector bodies are already required to check that some off-payroll workers are paying the correct taxes. This change will extend this requirement across the entire public sector workforce, and make the public sector body or agency responsible for paying the taxes, rather than just checking they have been paid.
As is currently the case, falling within the off-payroll tax rules will not change an individual’s status for employment rights as there is no direct link between employment taxes and these rights. However, those who wish to challenge their employment status for employment rights can take their case to an employment tribunal whether or not they are classified as employed for tax purposes.
The Government recognises concerns that determining whether or not the rules apply can be administratively demanding. In response to this, HMRC are developing an online tool that will help public sector bodies to determine whether or not the rules apply. This will provide certainty and clarity for all those who are required to make a determination, ensuring that only those who would have been employees if they were engaged directly will have to pay employment taxes.
HM Treasury
The off-payroll working rules, commonly known as IR35, are in place to ensure that where individuals would have been employees if they were providing their services directly, they pay broadly the same tax and National Insurance as other employees. However, the Government estimates that currently only around 10% of people who should pay tax on at least part of their company's income under these rules actually do so. This non-compliance is unfair, and the most recent estimate puts the cost to the Exchequer at £440m per year which, in turn, reduces the government’s ability to fund core services used by all such as the NHS.
There are many legitimate, commercial reasons for people to work through limited companies and for businesses to engage individuals in this way. The Government recognises the benefits to the economy of having a flexible labour market, and has no intention of preventing people from working through their own companies. However, the Government does not believe that an individual’s decision to work through a company should necessarily affect the amount of tax that they pay when they are remunerated for their work.
The Government considers it crucial that public sector bodies make sure that both they and those who work for them pay the right amount of tax. As such, the Government is taking action to improve compliance with the rules in the public sector. From April 2017, individuals working through their own company in the public sector will no longer be responsible for operating the off-payroll rules. Where an individual’s company is directly engaged to a public sector body, the public sector body will be responsible for determining whether or not the rules apply, and deducting any necessary employment taxes on payments to the individual’s company. Where this engagement takes place through an agency, the public sector body will be responsible for determining whether or not the rules apply and informing the agency of this decision, in order that any necessary employment taxes can be deducted by the agency.
It’s important to note that this change does not introduce a new liability, but is designed to ensure that the current rules work as intended. Legislation to stop individuals reducing their tax bill by working through a limited company has been in place for more than 15 years. Furthermore, these rules will not lead to self-employed individuals paying employment taxes; the rules only apply to those who would have been employed if they were engaged directly. Indeed, many public sector bodies are already required to check that some off-payroll workers are paying the correct taxes. This change will extend this requirement across the entire public sector workforce, and make the public sector body or agency responsible for paying the taxes, rather than just checking they have been paid.
As is currently the case, falling within the off-payroll tax rules will not change an individual’s status for employment rights as there is no direct link between employment taxes and these rights. However, those who wish to challenge their employment status for employment rights can take their case to an employment tribunal whether or not they are classified as employed for tax purposes.
The Government recognises concerns that determining whether or not the rules apply can be administratively demanding. In response to this, HMRC are developing an online tool that will help public sector bodies to determine whether or not the rules apply. This will provide certainty and clarity for all those who are required to make a determination, ensuring that only those who would have been employees if they were engaged directly will have to pay employment taxes.
HM Treasury
Alex said:
alfie2244 said:
The PSBs we are working for are all but begging us to continue..the reason they use us is they can't get PAYE people..go figure.
They could if they offered a decent salary.rustyuk said:
alfie2244 said:
Little update....this test asked more detailed questions and gave a solid pass.
https://www.ir35testing.co.uk/
That test has nothing to do with HMRC! https://www.ir35testing.co.uk/
(i) If a contractor is doing the work that a PAYE person would normally do then how are they classed as self-employed?
(ii) AIUI any tax/NI deducted by the PSB employer is offset against your tax liability for the year so wouldnt you be able to reclaim any overpaid tax?
rustyuk said:
alfie2244 said:
Little update....this test asked more detailed questions and gave a solid pass.
https://www.ir35testing.co.uk/
That test has nothing to do with HMRC! https://www.ir35testing.co.uk/
I realise it doesn't really matter what we think as it will be down to the PSB / Agents, their own confidence in being able to accurately asses the criteria and their aversion to taking risks.
Even though (temp) uplifts in rates are being mooted, we have resigned ourselves to shortly issuing 28 days notices and concentrating on private sector in future.
My main concern now is ensuring getting all invoice paid by Apr 5th.
Such a shame that genuine contractors will suffer because of others.
rustyuk said:
alfie2244 said:
Little update....this test asked more detailed questions and gave a solid pass.
https://www.ir35testing.co.uk/
That test has nothing to do with HMRC! https://www.ir35testing.co.uk/
What you have to remember is that HMRC have a skewed interpretation of the IR35 legislation - they are not "god" or "judges" on the subject.
Thats a big part of the problem - their tool will deem pretty much everyone "in" when in reality, a significant percentage arent.
daemon said:
Isnt all this being promoted as an "opportunity"? If PS organisations are less reliant on contractors, it means they're spending less, so can employ more permanent staff / pay more?
It costs a lot of money to recruit and train permanent staff, and you have to keep paying them when activity is low or the project is finished. Why do you think contractors exist?daemon said:
Thats a big part of the problem - their tool will deem pretty much everyone "in" when in reality, a significant percentage arent.
Exactly. The whole thing is a crock of s
t. It's all based on a bunch of vague rules, that even HMRC don't understand, yet the difference between being "in" and "out" is £10s of thousands a year in tax. Gassing Station | Business | Top of Page | What's New | My Stuff