IR35 and Umbrella Companies Confused

[x5x3]

Deep Thought said:

x5x3 said:

Autopilot said:

Lord Marylebone said:

I think exactly the same. My last job could be this one or could be years away! Just have to see how it goes.

Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.

When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.

They stick about 20% on top of my day rate and bill the customer.

Some of the other consultants have been with the company many years, others dip in and out as they need work.

Bit of a loaded question here, but if the IR35 legislation change does get passed in March and the end clients gets to determine the employment status of that specific role, how do you think this will affect you and your role?

a quick question - if the new IR35 legislation does go ahead then in this scenario who is it decides the status of the consultant - the end client or the consultancy company?

Surely it IS going ahead on 5th April rather than an IF?

depends who you ask - Sajid Javid is not sure apparently - https://economia.icaew.com/news/december-2019/chan...

[Deep Thought]

x5x3 said:

depends who you ask - Sajid Javid is not sure apparently - https://economia.icaew.com/news/december-2019/chan...

He committed to review it though, not stop it.

I think it was merely a pre-election ploy sadly.

But, i'd be happy to be proven wrong....

[rustyuk]

There is no chance of this getting revoked due to the number of big firms simply issuing blanket inside rulings.

[x5x3]

Either way - can anyone answer my original question please?

Lord Marylebone said:

Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.

When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.

They stick about 20% on top of my day rate and bill the customer.

Under the new legislation - who would be required to decide the status of Lord Marylebone - would it be the end-client or the consultancy company?

[anonymous-user]

x5x3 said:

Either way - can anyone answer my original question please?

Lord Marylebone said:

Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.

When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.

They stick about 20% on top of my day rate and bill the customer.

Under the new legislation - who would be required to decide the status of Lord Marylebone - would it be the end-client or the consultancy company?

I would say the end-client.

[worsy]

Eric Mc said:

Deep Thought said:

I would say the reality is they'll come over for a period of time then take the work back with them to complete.

If not i'm sure the consultancy will be well aware of what length of time to allow them to stay so they arent treated as resident.

Is that really what will happen?

Eric I think the actual reality is that these guys will be flying in Monday morning and leaving friday afternoon. With current EU free movement of labour no consideration is given to tax residency.

Certainly when I contracted for one of the large outsourcers with a significant Polish footprint it appeared not to be a consideration for their people. They get paid by the Polish Ltd company in Zloty.

[Eric Mc]

worsy said:

Eric I think the actual reality is that these guys will be flying in Monday morning and leaving friday afternoon. With current EU free movement of labour no consideration is given to tax residency.

Certainly when I contracted for one of the large outsourcers with a significant Polish footprint it appeared not to be a consideration for their people. They get paid by the Polish Ltd company in Zloty.

EU rules have no impact on whether a person is tax resident in the UK or not. It's entirely related to the actual number of days in the tax year they are living in the UK. It doesn't matter whether they are from France or mongolia.

[Caddyshack]

Deep Thought said:

Caddyshack said:

I have seen a few people working on NHS contracts (not I.T.) and they get 2 payslips from the Umbrella co. one is around £500 pm with tax and ni noted but obviously little or no tax paid and then another big payslip with no tax or ni, when questioned the Umbrella company says it is only a loan at that point as they do not know when the contract will end...this is utter BS as the people have worked there for a few years non stop and they feel the Umbrella co will sort out any tax issues...they will just fold like a cheap umberlla and HMRC will go after the worker...this is all because the NHS had some rule change and needed to pay out less to individuals with Ltd co.s

It sounds like they are not using a reputable Umbrella company.

There are some Umbrella companies that profess that they can get you as high as 90% of your day rate tax free however this is usually done via some sort of dodgy loan scheme.

HMRC are fully aware of this and as you say are quite capable of pursuing the individual.

One of the ladies I spoke to said a huge chunk of the hospital she works at are with the same company, even surgeons who have been on it a few yrs....

It is not isolated either, I have seen a few via other hospitals.

We tried to get them mortgages but the figures did not stack up (obviously) and the dodgy umbrella co said they had a broker who could get something for them but they charged about £3k fee.

[worsy]

Eric Mc said:

worsy said:

Eric I think the actual reality is that these guys will be flying in Monday morning and leaving friday afternoon. With current EU free movement of labour no consideration is given to tax residency.

Certainly when I contracted for one of the large outsourcers with a significant Polish footprint it appeared not to be a consideration for their people. They get paid by the Polish Ltd company in Zloty.

EU rules have no impact on whether a person is tax resident in the UK or not. It's entirely related to the actual number of days in the tax year they are living in the UK. It doesn't matter whether they are from France or mongolia.

I get that, what I'm saying is that I don't think it is a consideration for these people.

[x5x3]

catweasle said:

x5x3 said:

Either way - can anyone answer my original question please?

Lord Marylebone said:

Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.

When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.

They stick about 20% on top of my day rate and bill the customer.

Under the new legislation - who would be required to decide the status of Lord Marylebone - would it be the end-client or the consultancy company?

I would say the end-client.

Interesting - even though the end-client knows absolutely nothing about him/the ltd co/contract/MOO/substitution/ways of working/etc?

[Eric Mc]

worsy said:

Eric Mc said:

worsy said:

Eric I think the actual reality is that these guys will be flying in Monday morning and leaving friday afternoon. With current EU free movement of labour no consideration is given to tax residency.

Certainly when I contracted for one of the large outsourcers with a significant Polish footprint it appeared not to be a consideration for their people. They get paid by the Polish Ltd company in Zloty.

EU rules have no impact on whether a person is tax resident in the UK or not. It's entirely related to the actual number of days in the tax year they are living in the UK. It doesn't matter whether they are from France or mongolia.

I get that, what I'm saying is that I don't think it is a consideration for these people.

If they are living in the UK for four or five days out of seven, they would need to be very careful about their stay time as they could easily become UK tax resident.

[Eric Mc]

x5x3 said:

catweasle said:

x5x3 said:

Either way - can anyone answer my original question please?

Lord Marylebone said:

Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.

When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.

They stick about 20% on top of my day rate and bill the customer.

Under the new legislation - who would be required to decide the status of Lord Marylebone - would it be the end-client or the consultancy company?

I would say the end-client.

Interesting - even though the end-client knows absolutely nothing about him/the ltd co/contract/MOO/substitution/ways of working/etc?

Yes - it is the end client that has to make the decision.

[x5x3]

Eric Mc said:

worsy said:

Eric Mc said:

worsy said:

Eric I think the actual reality is that these guys will be flying in Monday morning and leaving friday afternoon. With current EU free movement of labour no consideration is given to tax residency.

Certainly when I contracted for one of the large outsourcers with a significant Polish footprint it appeared not to be a consideration for their people. They get paid by the Polish Ltd company in Zloty.

EU rules have no impact on whether a person is tax resident in the UK or not. It's entirely related to the actual number of days in the tax year they are living in the UK. It doesn't matter whether they are from France or mongolia.

I get that, what I'm saying is that I don't think it is a consideration for these people.

If they are living in the UK for four or five days out of seven, they would need to be very careful about their stay time as they could easily become UK tax resident.

Indeed, but these companies have done this before and they know the rules, people will be rolled off before they reach the threshold and replaced with new people.

[anonymous-user]

x5x3 said:

Indeed, but these companies have done this before and they know the rules, people will be rolled off before they reach the threshold and replaced with new people.

Perhaps it should be seen as the "role" or "Job" that is either in or out of IR35 not the person doing it?

[Toaster Pilot]

Currently working outside, end client is dragging their heels on deciding how they’re going to play it.

Project might be running out of steam anyway and I’m being approached about an inside role that is c. +25% on rate but would have a fair bit of travel expense involved. Long contract though.

Not sure what to do, tbh.

[Deep Thought]

catweasle said:

x5x3 said:

Indeed, but these companies have done this before and they know the rules, people will be rolled off before they reach the threshold and replaced with new people.

Perhaps it should be seen as the "role" or "Job" that is either in or out of IR35 not the person doing it?

They're unlikely to be contractors so not applicable. They'll be working for the 3rd party european consultancy / company.

[anonymous-user]

Autopilot said:

Lord Marylebone said:

I think exactly the same. My last job could be this one or could be years away! Just have to see how it goes.

Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.

When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.

They stick about 20% on top of my day rate and bill the customer.

Some of the other consultants have been with the company many years, others dip in and out as they need work.

Bit of a loaded question here, but if the IR35 legislation change does get passed in March and the end clients gets to determine the employment status of that specific role, how do you think this will affect you and your role?

Sorry, just saw this now:

I don’t think it’ll change anything for me.

As previously said above, it’s the end client that determines if I am an ‘employee’ for them or not.

I don’t have a specific desk at the clients place.
I don’t have an email address at the clients place.
I sign in and out as a guest.
I don’t have fixed work hours or days.
I work from home quite a bit.
I work for multiple clients at the same time.
Etc

[Autopilot]

x5x3 said:

catweasle said:

x5x3 said:

Either way - can anyone answer my original question please?

Lord Marylebone said:

Fortunately I 'work for' a large consultancy company. They are quite well known within the property industry, and their main role is to constantly look for work for all the consultants like me.

When they find work for us to do, they then send us to the customer as though we are an employee of theirs. I just bill them at the end of every month for my days and they pay me.

They stick about 20% on top of my day rate and bill the customer.

Under the new legislation - who would be required to decide the status of Lord Marylebone - would it be the end-client or the consultancy company?

I would say the end-client.

Interesting - even though the end-client knows absolutely nothing about him/the ltd co/contract/MOO/substitution/ways of working/etc?

It is absolutely the end clients responsibility as it's up to them what the engagement looks like. It's a role and its associated working practices that are assessed, so the status will be set before it goes to a recruiter for advertising. They don't care about the Ltd Co contractor, they aren't a factor as right now it's about how they want a job done.

[Eric Mc]

x5x3 said:

Indeed, but these companies have done this before and they know the rules, people will be rolled off before they reach the threshold and replaced with new people.

I wonder if they have the systems in place to control the residency affairs of their employees. I think the risks in this area are very high.

[Eric Mc]

Lord Marylebone said:

Sorry, just saw this now:

I don’t think it’ll change anything for me.

As previously said above, it’s the end client that determines if I am an ‘employee’ for them or not.

I don’t have a specific desk at the clients place.
I don’t have an email address at the clients place.
I sign in and out as a guest.
I don’t have fixed work hours or days.
I work from home quite a bit.
I work for multiple clients at the same time.
Etc

What about substitution?