Discussion
Hi all
Is there anyone on here who contract inside IR-35
New contract starts Monday and my head hurts and since being emailing my the finance department of my agency, they have only confused matters worse
Before i post my questions, i thought i would ask if anyone here works inside IR35 for gov or public
Thanks
Is there anyone on here who contract inside IR-35
New contract starts Monday and my head hurts and since being emailing my the finance department of my agency, they have only confused matters worse
Before i post my questions, i thought i would ask if anyone here works inside IR35 for gov or public
Thanks
It know a fair bit but you may wish to ask on here.
https://forums.contractoruk.com/public-sector-ir35...
https://forums.contractoruk.com/public-sector-ir35...
Is there anything specific you wanted to know?
I've been contracting for about 12 years and am currently working for the Government albeit outside IR35. I won't say I'm an expert, but when the change in legislation was coming in last year, I was the liaison between us contractors and the HR Dept.
As you've probably read, a few Gov organisations just deemed many roles inside IR35 so made bit of a mess when they had mass walkouts. The issue with that was to safeguard themselves, organisations were just making blanket statements and just deeming everybody inside to mitigate against the risk of later being found to be the wrong decision and then having to stump up PAYE and NI.
It all boils down to Supervision, Direction or Control. If the role clearly shows you aren't managed as such and are able to do the work in the way you want to, then you're outside.
The contractors where I am were all deemed outside of IR35 because we have a quite pragmatic management group here.
Don't forget, IR35 only applies to Government organisations who are subject to FOI requests. If the organisation you're in are not subject to FOI, then the legislation doesn't apply in this way....I say that for a reason, that reason being that the Govt don't really understand IR35 as it was just kind of thrust on to them.
I've been contracting for about 12 years and am currently working for the Government albeit outside IR35. I won't say I'm an expert, but when the change in legislation was coming in last year, I was the liaison between us contractors and the HR Dept.
As you've probably read, a few Gov organisations just deemed many roles inside IR35 so made bit of a mess when they had mass walkouts. The issue with that was to safeguard themselves, organisations were just making blanket statements and just deeming everybody inside to mitigate against the risk of later being found to be the wrong decision and then having to stump up PAYE and NI.
It all boils down to Supervision, Direction or Control. If the role clearly shows you aren't managed as such and are able to do the work in the way you want to, then you're outside.
The contractors where I am were all deemed outside of IR35 because we have a quite pragmatic management group here.
Don't forget, IR35 only applies to Government organisations who are subject to FOI requests. If the organisation you're in are not subject to FOI, then the legislation doesn't apply in this way....I say that for a reason, that reason being that the Govt don't really understand IR35 as it was just kind of thrust on to them.
bigandclever said:
Autopilot said:
Don't forget, IR35 only applies to Government organisations who are subject to FOI requests.
Erm... that's not right.It could have changed of course, but the Government guidelines for the off payroll rules did states that "All public sector bodies that are subject to the Freedom of Information Act (FOIA) provisions are responsible for implementing the changes to the off-payroll working rules".
Too Late said:
Hi all
Is there anyone on here who contract inside IR-35
New contract starts Monday and my head hurts and since being emailing my the finance department of my agency, they have only confused matters worse
Before i post my questions, i thought i would ask if anyone here works inside IR35 for gov or public
Thanks
One thing to bear in mind is you WILL pay tax as follows :-Is there anyone on here who contract inside IR-35
New contract starts Monday and my head hurts and since being emailing my the finance department of my agency, they have only confused matters worse
Before i post my questions, i thought i would ask if anyone here works inside IR35 for gov or public
Thanks
EMPLOYERS National Insurance (around 14%)
Apprenticeship Levy (around 1%)
Employees National Insurance
PAYE tax at the prevailing rate
The umbrella company will be obliged to pay you something like 2 days a month annual leave, however they'll do that by setting aside funds from your day rate.
Umbrella company fees (usually a few ££ per week)
All in all you could lose nigh on 50% of your day rate to the above, by the time you get it in to your account
daemon said:
One thing to bear in mind is you WILL pay tax as follows :-
EMPLOYERS National Insurance (around 14%)
Apprenticeship Levy (around 1%)
Employees National Insurance
PAYE tax at the prevailing rate
The umbrella company will be obliged to pay you something like 2 days a month annual leave, however they'll do that by setting aside funds from your day rate.
Umbrella company fees (usually a few ££ per week)
All in all you could lose nigh on 50% of your day rate to the above, by the time you get it in to your account
Plus not being able to offset / reclaim travel or accommodation expenses.EMPLOYERS National Insurance (around 14%)
Apprenticeship Levy (around 1%)
Employees National Insurance
PAYE tax at the prevailing rate
The umbrella company will be obliged to pay you something like 2 days a month annual leave, however they'll do that by setting aside funds from your day rate.
Umbrella company fees (usually a few ££ per week)
All in all you could lose nigh on 50% of your day rate to the above, by the time you get it in to your account
alfie2244 said:
daemon said:
One thing to bear in mind is you WILL pay tax as follows :-
EMPLOYERS National Insurance (around 14%)
Apprenticeship Levy (around 1%)
Employees National Insurance
PAYE tax at the prevailing rate
The umbrella company will be obliged to pay you something like 2 days a month annual leave, however they'll do that by setting aside funds from your day rate.
Umbrella company fees (usually a few ££ per week)
All in all you could lose nigh on 50% of your day rate to the above, by the time you get it in to your account
Plus not being able to offset / reclaim travel or accommodation expenses.EMPLOYERS National Insurance (around 14%)
Apprenticeship Levy (around 1%)
Employees National Insurance
PAYE tax at the prevailing rate
The umbrella company will be obliged to pay you something like 2 days a month annual leave, however they'll do that by setting aside funds from your day rate.
Umbrella company fees (usually a few ££ per week)
All in all you could lose nigh on 50% of your day rate to the above, by the time you get it in to your account
pherlopolus said:
Mr Pointy said:
OP, don't you have an accountant who can give to advice?
no point, if deemed "in" you are an employee, tax will be taken at source. You may as well just get it paid into a personal account and make your LTD *if you have one dormant/unused for the durationEric Mc said:
You would have to renegotiate the contract between you and the "employer" to do that.
You can't "pretend" that the company isn't the rightful recipient of the income because the tax rules are inconvenient.
??? If company employ the person via umbrella not the Ltd company in the 1st place or have I missed something?You can't "pretend" that the company isn't the rightful recipient of the income because the tax rules are inconvenient.
pherlopolus said:
not that I would ever take an Inside contract, but my understanding is that the money is paid after tax into your LTD account via brolley, or direct to you via a brolley. makes no difference.
Ltd via umbrella? Via agency and use Ltd but don't think Umbrella....could be wrong.Eric Mc said:
You would have to renegotiate the contract between you and the "employer" to do that.
You can't "pretend" that the company isn't the rightful recipient of the income because the tax rules are inconvenient.
If you're inside IR35, the company ISNT the rightful recipient of the income, the individual is.You can't "pretend" that the company isn't the rightful recipient of the income because the tax rules are inconvenient.
Outside IR35 = you're an employee of your own limited company (or umbrella co). You get your day rate paid to the LTD Co, the LTD Co pays you.
Inside IR35 = you're effectively an agency worker (for want of a better description), the agency pays you (usually through their umbrella company) via PAYE and directly in to your personal account. No requirement to go through limited company
daemon said:
Eric Mc said:
You would have to renegotiate the contract between you and the "employer" to do that.
You can't "pretend" that the company isn't the rightful recipient of the income because the tax rules are inconvenient.
If you're inside IR35, the company ISNT the rightful recipient of the income, the individual is.You can't "pretend" that the company isn't the rightful recipient of the income because the tax rules are inconvenient.
Outside IR35 = you're an employee of your own limited company (or umbrella co). You get your day rate paid to the LTD Co, the LTD Co pays you.
Inside IR35 = you're effectively an agency worker (for want of a better description), the agency pays you (usually through their umbrella company) via PAYE and directly in to your personal account. No requirement to go through limited company
Although I do believe, but have no actual experience, that some agencies are set up to be able to employ a Ltd Co.
Edited by alfie2244 on Saturday 20th January 10:17
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