Contractors: IR35 & general discussion
Discussion
I should hopefully be finding out today. My biggest cause for concern is that, although the client are keen for me to be outside IR35, they are also putting all their faith in CEST.
Fortunately I think there is a good chance of CEST agreeing with our assessment that the engagement is outside of IR35.
Useful link for others in the same position:
https://www.contractorcalculator.co.uk/how_ir35_pa...
Fortunately I think there is a good chance of CEST agreeing with our assessment that the engagement is outside of IR35.
Useful link for others in the same position:
https://www.contractorcalculator.co.uk/how_ir35_pa...
Clockwork Cupcake said:
I should hopefully be finding out today. My biggest cause for concern is that, although the client are keen for me to be outside IR35, they are also putting all their faith in CEST.
Fortunately I think there is a good chance of CEST agreeing with our assessment that the engagement is outside of IR35.
Useful link for others in the same position:
https://www.contractorcalculator.co.uk/how_ir35_pa...
Useful link, thanks. CEST has been a bit of a bust for me - I end up with an Indeterminate determination. My contract has the QDOS worded substitution clause but I don't think it's sufficient to say Yes to the substitution in CEST.Fortunately I think there is a good chance of CEST agreeing with our assessment that the engagement is outside of IR35.
Useful link for others in the same position:
https://www.contractorcalculator.co.uk/how_ir35_pa...
QDOS said:
`The Contractor has the right, at its own expense, to enlist additional or substitute Staff in the performance of the Services or may, sub-contract all or part of the Services, provided that the consultancy provides details, whenever practicable, of the proposed substitute or sub-contractor ahead of the planned substitution and subject to the Company being reasonably satisfied that such additional Staff or any such sub-contractor has the required skills, qualifications, resources and personnel to provide the Services to the required standard.`
and the question is HMRC said:
A substitute is someone you send in your place to do your role.
This can include rejecting a substitute even if they are equally qualified, and meet your client’s interviewing, vetting and security clearance procedures.
Not really sure what you're meant to do with an Indeterminate determination, so I'm just going to have QDOS review my contract again since I'm working for a small company and the determination is still with me.This can include rejecting a substitute even if they are equally qualified, and meet your client’s interviewing, vetting and security clearance procedures.
Anyone have an opinion on whether post-April we'll see more or less investigations into people contracting with small companies? One school of thought is that HMRC will focus their attention on the big co's to check they're implementing things correctly, the other is that they'll assume companies are sorting it and they'll spend more time on the little guys. My instinct is that they'll focus attention on any companies which are determining people as outside and make them justify why.
Historically at least, my accountant reckoned their focus had generally been on high profile people (like all the TV presenters who seem to be getting their attention) rather than volume or chance of successful results, to their own detriment.
He probably has a point and I don't see any reason why April would change their approach. But who knows.
He probably has a point and I don't see any reason why April would change their approach. But who knows.
theboss said:
super7 said:
Should find out today if we're in or out of IR35.
To be honest i'm not fussed either way, if were out, we carry on as normal, if we're in we've been offered a bloody good package to go permie (working for a consultancy) so could be win win situation as the basic is massive and then bonus and perks.
But.... thinking about it.... PSC's could have been fixed very easily by HMRC by creating a new class of Ltd company for PSC's and making a minimum director salary (to catch some more NI and Emp Ni) and increased Corporation tax to cover the NI bit a bit more.
Would have saved a whole load of bad press and s
t!
I don’t think such a simple solution would work. What would the criteria be for registering this new type of company? Why wouldn’t I simply register the old type and carry on doing as I have been? How do you distinguish between a “disguised employment” type of Ltd co operator and a more genuine service provider?To be honest i'm not fussed either way, if were out, we carry on as normal, if we're in we've been offered a bloody good package to go permie (working for a consultancy) so could be win win situation as the basic is massive and then bonus and perks.
But.... thinking about it.... PSC's could have been fixed very easily by HMRC by creating a new class of Ltd company for PSC's and making a minimum director salary (to catch some more NI and Emp Ni) and increased Corporation tax to cover the NI bit a bit more.
Would have saved a whole load of bad press and s
t! I do think the current situation with blanket PSC bans is rubbish, but people need to try and adapt to the new way of working. I’ve gone from a situation of being caught by a blanket assessment to distancing myself from IR35 very safely. Opportunities do exist.
Yes you could try and register as old type Ltd company, but your accounts will prove what you are and your companies house confirmation statement. BIG companies pay more CT than LITTLE companies, why not have a rate for PSC companies. Or... Agencies can stipulate they only work with PSC ltd companies.
And no need for determination, or umbrellas, or extra workload or reduced VAT takings,
Well a supplier (umbrella company) we only use for contractors has assured us they were dealing with it
However I’m hearing there are some contractors who are pushing back - basically wanting higher rates.
Issue is we hate a fixed price contract with the end client without the ability to pass on variations for rate changes. In this example we are barely making 5% on the job. End result is if that contractor doesn’t change his position we will simply use someone else.
End clients are simply not accepting any step up in cost so then it comes to the middle man and they then have the option of do the work at pass through with all associates risk OR onboard the contractor on a fixed term contract / resolved under umbrella company.
However I’m hearing there are some contractors who are pushing back - basically wanting higher rates.
Issue is we hate a fixed price contract with the end client without the ability to pass on variations for rate changes. In this example we are barely making 5% on the job. End result is if that contractor doesn’t change his position we will simply use someone else.
End clients are simply not accepting any step up in cost so then it comes to the middle man and they then have the option of do the work at pass through with all associates risk OR onboard the contractor on a fixed term contract / resolved under umbrella company.
Clients don't want to pay more and contractors don't want to take a pay cut so there is a bit of an impasse at the moment. However I'd say currently the clients have most of the bargaining power so rates will stay the same at best meaning contractors are shafted for the time being.
Whether that balance of power changes over the next few months\years is the question and that largely depends on whether projects etc become at risk due to a lack of resource.
Whether that balance of power changes over the next few months\years is the question and that largely depends on whether projects etc become at risk due to a lack of resource.
Welshbeef said:
End result is if that contractor doesn’t change his position we will simply use someone else.
Who will also want a rate increase!You are now responsible for paying Employers NI and likely Apprentice Levy, and you are expecting the contractor to swallow your 14% tax out of their cut plus take a further hit with their extra costs.......
super7 said:
You don't distinguish between 'disguised employment' and a genuine service provider! That's the point!
Yes you could try and register as old type Ltd company, but your accounts will prove what you are and your companies house confirmation statement. BIG companies pay more CT than LITTLE companies, why not have a rate for PSC companies. Or... Agencies can stipulate they only work with PSC ltd companies.
And no need for determination, or umbrellas, or extra workload or reduced VAT takings,
You still end up with an awfully grey line between the “old” and the “new” business registration types.Yes you could try and register as old type Ltd company, but your accounts will prove what you are and your companies house confirmation statement. BIG companies pay more CT than LITTLE companies, why not have a rate for PSC companies. Or... Agencies can stipulate they only work with PSC ltd companies.
And no need for determination, or umbrellas, or extra workload or reduced VAT takings,
Who does this apply to? Anyone who supplies consultancy services? By what definition? People would just band together to form consultancies with a handful of people instead of each man and his spouse.
Anubis said:
Guvernator said:
I can very much see zero rights employees becoming the norm in the future, why wouldn't they? It's pretty much a win-win for large companies.
Yes totally...it's common sense. You can get pretty much the same thing for far less commitment and hassle long term. I can 100% see people becoming envious of others for having a perm job. A bit like those with final salary gold plated pensions today. A case of "ah wow mate, lucky you! You got a perm contract...now way! I would hold on to that if I were you...not many of those around today"
It's a very sad state of affairs. Mr and Mrs average will end up in a situation of having no rights, no holidays, punished for taking too many sick days (just get rid of them) and so on. Mr and Mrs average won't run things like a business...they'll avoid paying into pensions, take out loans based on their current day rates (i.e. "my current 3 month contract") and everything, which is only going to make huge societal problems later on.
Edited by Anubis on Monday 2nd March 15:17
Fittster said:
Anubis said:
Guvernator said:
I can very much see zero rights employees becoming the norm in the future, why wouldn't they? It's pretty much a win-win for large companies.
Yes totally...it's common sense. You can get pretty much the same thing for far less commitment and hassle long term. I can 100% see people becoming envious of others for having a perm job. A bit like those with final salary gold plated pensions today. A case of "ah wow mate, lucky you! You got a perm contract...now way! I would hold on to that if I were you...not many of those around today"
It's a very sad state of affairs. Mr and Mrs average will end up in a situation of having no rights, no holidays, punished for taking too many sick days (just get rid of them) and so on. Mr and Mrs average won't run things like a business...they'll avoid paying into pensions, take out loans based on their current day rates (i.e. "my current 3 month contract") and everything, which is only going to make huge societal problems later on.
Edited by Anubis on Monday 2nd March 15:17
I had a look through my linkedin connections today. It's astonishing how many of them have recently retired, many before 'time'. i'm sure not all due to the changes, but that's a lot of experience and wisdom no longer available to the wider economy. Really stacking up those unintended consequences!
PSB1 said:
I had a look through my linkedin connections today. It's astonishing how many of them have recently retired, many before 'time'. i'm sure not all due to the changes, but that's a lot of experience and wisdom no longer available to the wider economy. Really stacking up those unintended consequences!
Will be me soon 
98elise said:
PSB1 said:
I had a look through my linkedin connections today. It's astonishing how many of them have recently retired, many before 'time'. i'm sure not all due to the changes, but that's a lot of experience and wisdom no longer available to the wider economy. Really stacking up those unintended consequences!
Will be me soon 
Edited by hyphen on Tuesday 3rd March 21:19
bonerp said:
Question;
Are there any decent firms providing standalone hmrc investigation insurance?
My liability insurance ends at the end of my contract but I'm thinking extending this cover may be useful.
Any recommendations?
Thanks
IPSE Plus if you just want investigation cover, QDOS TLC35 if you want it to cover potential liability/interest/penalties too.Are there any decent firms providing standalone hmrc investigation insurance?
My liability insurance ends at the end of my contract but I'm thinking extending this cover may be useful.
Any recommendations?
Thanks
The lords review is still going on...this was recorded from Monday.
Click here to watch (about an hour)
These people are accountants, lawyers and tax specialists.
They made a very interesting point at the very end about the BBC and HMRC. Essentially, the BBC actually followed HMRC advice and put some staff as self employed via LTD; as the years went on HMRC moved the goal posts quietly and went back retrospectively to catch them out.
HMRC have gone rogue and are making rules up as they go along so people fall foul of their own doing... very underhand. Its about a certain few in either the treasury or HMRC who have certain agendas and now see HMRC as a function to reap as much tax in any ruthless underhand way they can rather than simply collecting monies owed.
Is this really how a modern democracy should function?!
Click here to watch (about an hour)
These people are accountants, lawyers and tax specialists.
They made a very interesting point at the very end about the BBC and HMRC. Essentially, the BBC actually followed HMRC advice and put some staff as self employed via LTD; as the years went on HMRC moved the goal posts quietly and went back retrospectively to catch them out.
HMRC have gone rogue and are making rules up as they go along so people fall foul of their own doing... very underhand. Its about a certain few in either the treasury or HMRC who have certain agendas and now see HMRC as a function to reap as much tax in any ruthless underhand way they can rather than simply collecting monies owed.
Is this really how a modern democracy should function?!
Edited by Anubis on Wednesday 4th March 10:07
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