Contractors: IR35 & general discussion

[snake_oil]

FFS.

The British government is steaming ahead with plans to extend its controversial off-payroll working rules to the private sector in draft legislation published today.

From April 2020, medium and large companies will be responsible for determining whether the contractors they hire fall within the scope of IR35 legislation and are liable to pay a higher rate of tax.

https://www.theregister.co.uk/AMP/2019/07/11/gov_e...

Assholes.

[snake_oil]

Countdown said:

Agreed. Another thing is where a person is sat next to a permie doing more or less the same work but arguing that they're a "Contractor".

You seem to be putting the blame on the contractor here. How else should they describe themselves if they are not PAYE through the client?

[snake_oil]

And who's fault is that. The contractor or the client?

[snake_oil]

Eric Mc said:

What this new imposition means is that this same liability to tax and NI in regards to those operating through an intermediary (i.e. a limited company, partnership, trust etc) also falls on the employer - just like it always has in regards to hiring somebody on a sole trader basis.

Going back to an older post in this thread. Simply put, in a client > agency > contractor ltd co > contractor type relationship (which I'm sure is what most contractors operate under) who is classed as the employer?

Does the client have any responsibility to manage anything with the new rules or can they simply point to the agency?

[snake_oil]

A question to which I think I know the answer but will stay schtum for now to gather opinion.

If a working relationship looks like this:

Contractor > Ltd Co > Agency > Client (Supplier) > End Client

Who is the entity the responsibility falls upon to determine the employee status?

Ie recruited through an agency to work for a major company, who in turn have many customers at which there are numerous projects.

Edited by snake_oil on Thursday 3rd October 21:42

[snake_oil]

wormus said:

Always the end client, the person you are doing the work for.

Can you check my edit.

Say, a contractor could be working on projects at several end clients simultaneously. And have nothing to do with the end client in terms of management, IT, anything like that.

Simply delivering a project.

[snake_oil]

wormus said:

worsy said:

That's not the case, in that scenario it would be the Client (Supplier). It is the fee payer that decides.

https://www.gov.uk/guidance/april-2020-changes-to-...

I think he was suggesting he could sub contract through another supplier (e.g. Accenture) and remain hidden. This is is not the case as the end client gets to decide if the work is inside IR35. If that’s the case, they instruct the supplier to deduct tax at source.

No that's not what I'm suggesting.

Client (supplier) has a project to deliver widgets to their customer, the End Client in my analogy.

The supplier engages my Ltd Co via an agency for an individual in my company to deliver this project. The Ltd Co contract is with the agency. Effectively the Ltd Co is working for the Supplier. But delivering widgets to End Client.

The contract and the project may last for say, 2 months and Ltd Co has the freedom to deliver the project how it sees fit. But due to security reasons uses a laptop supplied by the supplier and has a supplier email address.

When the project is delivered, Supplier is happy with the services Ltd Co provides, so engage the services again to deliver some more widgets to End Client B and issues a new contract.

And so on and so forth. I am not sure End Clients A, B..... N etc should be determining the employment status of individuals within the Ltd Co.

[snake_oil]

wormus said:

snake_oil said:

No that's not what I'm suggesting.

Client (supplier) has a project to deliver widgets to their customer, the End Client in my analogy.

The supplier engages my Ltd Co via an agency for an individual in my company to deliver this project. The Ltd Co contract is with the agency. Effectively the Ltd Co is working for the Supplier. But delivering widgets to End Client.

The contract and the project may last for say, 2 months and Ltd Co has the freedom to deliver the project how it sees fit. But due to security reasons uses a laptop supplied by the supplier and has a supplier email address.

When the project is delivered, Supplier is happy with the services Ltd Co provides, so engage the services again to deliver some more widgets to End Client B and issues a new contract.

And so on and so forth. I am not sure End Clients A, B..... N etc should be determining the employment status of individuals within the Ltd Co.

Ah, in that case you are talking about different services. You are being paid to create widgets so employment status is determined by the supplier you are working for. They will tell your agency and they deduct tax at source. The contract to buy the widgets that have been made is between the supplier and the client. It’s got nothing to do with you.

Just to be absolutely clear around the services provided, I am not manufacturing the widgets. The supplier manufacturers the widgets, these widgets are then delivered to the end clients (via the project) to deliver a service.