Contractors: IR35 & general discussion
Discussion
Gazzab said:
It’s not relevant.
I don't pretend to understand how Umbrella companies work.I guess the relevance is what the criteria is for furlough and whether or not that information has any relevance.
I'm just glad that I have been employed by my own Limited Company for 20+ years as it means that I don't need to worry my "pretty little head" [sic] about such things.
Clockwork Cupcake said:
Gazzab said:
It’s not relevant.
I don't pretend to understand how Umbrella companies work.I guess the relevance is what the criteria is for furlough and whether or not that information has any relevance.
I'm just glad that I have been employed by my own Limited Company for 20+ years as it means that I don't need to worry my "pretty little head" [sic] about such things.
Gazzab said:
Clockwork Cupcake said:
Gazzab said:
It’s not relevant.
I don't pretend to understand how Umbrella companies work.I guess the relevance is what the criteria is for furlough and whether or not that information has any relevance.
I'm just glad that I have been employed by my own Limited Company for 20+ years as it means that I don't need to worry my "pretty little head" [sic] about such things.
Gazzab said:
Umbrella isn’t relevant either. The key is that he was employed and is no longer employed. The employer, in this instance an umbrella, can choose to re-employ and out straight into furlough. But that has costs for the employer.
Right. In which case why should the Umbrella? They are just a parasite who owe you nothing. 
Without wishing to divert this too much. Is there actually any reason to use an umbrella vs. direct paye from end client? I know they advertise great savings but if the reality is PAYE anyway, what's the point? Especially when stuff like this happens and you get zero employee benefits anyway.
Gad-Westy said:
Without wishing to divert this too much. Is there actually any reason to use an umbrella vs. direct paye from end client? I know they advertise great savings but if the reality is PAYE anyway, what's the point? Especially when stuff like this happens and you get zero employee benefits anyway.
It really depends on the client. If you go back to pre-1999 (ie. pre-IR35) then clients would sometimes engage contractors on a Sole Trader basis. But then the rules changed and the client might be liable for PAYE and NI. And so they started insisting on Limited Company. And then IR35 came along, and the whole cat & mouse began. (I missed out a few steps. Like the chancellor at the time (Gordon Brown as I recall) changing the rules such that a load of Sole Traders who had so far not incorporated were now incentivised to incorporate, and then a little while later he declared "f
k me! Look at all these chancer who have now incorporated! Get them!" and started the now familiar rhetoric about tax dodgers). Gad-Westy said:
Without wishing to divert this too much. Is there actually any reason to use an umbrella vs. direct paye from end client? I know they advertise great savings but if the reality is PAYE anyway, what's the point? Especially when stuff like this happens and you get zero employee benefits anyway.
What great savings? They charge you for using them. They deduct eNI and your personal taxes. Those advertising savings are surely dodgey?Gazzab said:
Gad-Westy said:
Without wishing to divert this too much. Is there actually any reason to use an umbrella vs. direct paye from end client? I know they advertise great savings but if the reality is PAYE anyway, what's the point? Especially when stuff like this happens and you get zero employee benefits anyway.
What great savings? They charge you for using them. They deduct eNI and your personal taxes. Those advertising savings are surely dodgey?Clockwork Cupcake said:
Gad-Westy said:
Without wishing to divert this too much. Is there actually any reason to use an umbrella vs. direct paye from end client? I know they advertise great savings but if the reality is PAYE anyway, what's the point? Especially when stuff like this happens and you get zero employee benefits anyway.
It really depends on the client. If you go back to pre-1999 (ie. pre-IR35) then clients would sometimes engage contractors on a Sole Trader basis. But then the rules changed and the client might be liable for PAYE and NI. And so they started insisting on Limited Company. And then IR35 came along, and the whole cat & mouse began. (I missed out a few steps. Like the chancellor at the time (Gordon Brown as I recall) changing the rules such that a load of Sole Traders who had so far not incorporated were now incentivised to incorporate, and then a little while later he declared "f
k me! Look at all these chancer who have now incorporated! Get them!" and started the now familiar rhetoric about tax dodgers). Gad-Westy said:
Cheers. But if the contractor is going to be paye anyway, why not just cut out the middle man? Is this to do with Employer NI and the client avoiding paying it?
Pretty much. These days the use of an Umbrella company is more to the benefit of the client. [Edit: And the convenience of lazy contractors who don't want to set up a Limited Company (and who are, by definition, probably not "In Business on [their] Own Account" anyway as if they were then they'd go to the hassle of setting up their own company. But I digress. And will also maybe get flamed]
I think the only benefit to the contractor is that the Umbrella factors the risk of client default. And as someone who had to sue an agency over exactly that scenario, I take that with a pinch of salt anyway.
(I won, btw. It was contractually clear cut and as I said to the agent off the record, "what the f
k do you think you get your 21% for?")Edited by Clockwork Cupcake on Wednesday 2nd December 22:05
Gad-Westy said:
Cheers. But if the contractor is going to be paye anyway, why not just cut out the middle man? Is this to do with Employer NI and the client avoiding paying it?
The end client doesn't want you as an employee they don't want you to have any rights and they don't want to pay eNI....but they do want to tell you what to do and when.Ita a funny situation (no point getting angry now its done). But my guess is in time something will come along to make it rebalance. Seems big 4 have muscled in but they charge way more so there has to be a middle ground it used to be ltd contractors who knows what next.
Gad-Westy said:
Without wishing to divert this too much. Is there actually any reason to use an umbrella vs. direct paye from end client? I know they advertise great savings but if the reality is PAYE anyway, what's the point? Especially when stuff like this happens and you get zero employee benefits anyway.
The end client will want to distance themselves, using an umbrella / agency ensures the person has no employee rights after x years.Clockwork Cupcake said:
Gad-Westy said:
Cheers. But if the contractor is going to be paye anyway, why not just cut out the middle man? Is this to do with Employer NI and the client avoiding paying it?
Pretty much. These days the use of an Umbrella company is more to the benefit of the client. I think the only benefit to the contractor is that the Umbrella factors the risk of client default. And as someone who had to sue an agency over exactly that scenario, I take that with a pinch of salt anyway.
(I won, btw. It was contractually clear cut and as I said to the agent off the record, "what the f
k do you think you get your 21% for?")Gecko1978 said:
Seems big 4 have muscled in but they charge way more so there has to be a middle ground it used to be ltd contractors who knows what next.
The Big 4 were actively lobbying in favour of IR35 right from the beginning. They have never wanted indies under-cutting them and providing a better service than their drones. We have always been a thorn in their side and they have been waging a 20+ year war on us to shut us down, with the help of successive governments. Gad-Westy said:
Cheers. I'm a few contracts in now and thankfully have avoided this so far but it's clearly likely to be more prevalent in future.
I've been contracting for 21+ years now. I've probably seen it all now. LOL. I'd happily retire and work for beer money on contracts that amused me, if I could afford to. But I have a fundamental attitude problem that means I can't take on the slave collar of being someone's employee. Not least due to some D/s s
t with actual collars. But that is probably TMI and I shouldn't post when drunk. Annnnnnnnnnway.
Clockwork Cupcake said:
I've been contracting for 21+ years now. I've probably seen it all now. LOL.
I'd happily retire and work for beer money on contracts that amused me, if I could afford to. But I have a fundamental attitude problem that means I can't take on the slave collar of being someone's employee. Not least due to some D/s st with actual collars. But that is probably TMI and I shouldn't post when drunk.
Annnnnnnnnnway.
LOL. Thread diversion! I'd happily retire and work for beer money on contracts that amused me, if I could afford to. But I have a fundamental attitude problem that means I can't take on the slave collar of being someone's employee. Not least due to some D/s s
t with actual collars. But that is probably TMI and I shouldn't post when drunk. Annnnnnnnnnway.
Gecko1978 said:
Gad-Westy said:
Cheers. But if the contractor is going to be paye anyway, why not just cut out the middle man? Is this to do with Employer NI and the client avoiding paying it?
The end client doesn't want you as an employee they don't want you to have any rights and they don't want to pay eNI....but they do want to tell you what to do and when.Ita a funny situation (no point getting angry now its done). But my guess is in time something will come along to make it rebalance. Seems big 4 have muscled in but they charge way more so there has to be a middle ground it used to be ltd contractors who knows what next.
Clockwork Cupcake said:
Pretty much. These days the use of an Umbrella company is more to the benefit of the client.
[Edit: And the convenience of lazy contractors who don't want to set up a Limited Company (and who are, by definition, probably not "In Business on [their] Own Account" anyway as if they were then they'd go to the hassle of setting up their own company. But I digress. And will also maybe get flamed]
In my line of business (financial services) almost every large player will no longer deal with one man band PSCs, primarily due to the delayed but still forthcoming IR35 changes. So the sole remaining way of engaging with them as a day rate contractor is via an Umbrella company - there is simply no other option available.[Edit: And the convenience of lazy contractors who don't want to set up a Limited Company (and who are, by definition, probably not "In Business on [their] Own Account" anyway as if they were then they'd go to the hassle of setting up their own company. But I digress. And will also maybe get flamed]
Of course the Umbrella company arrangement is entirely contrived and for the sole benefit of the client:
Engage a highly skilled contractor on a flexible basis - check
But without any IR35 assessments or risk - check
Whilst making the contractor pay the employers NI - check
Where the contractor pays full PAYE as an employee to HMRC, but without actually being a real employee with associated benefits (holidays, sick pay, pension etc) - check
Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff