• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

Is using an agency subject to DOTAS registration?

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    Is using an agency subject to DOTAS registration?

    You would have thought not.

    However I hear the faintest whisper of a rumour that we may soon see some form of press release from our friends at HMRC suggesting that as part of their policing of the DOTAS regime, certain agency arrangements that create a tax advantage "should be" DOTAS registered.

    Obvious advantage is that it opens the door to APN.

    Watch this space.

    #2
    Originally posted by Rob79 View Post
    You would have thought not.

    However I hear the faintest whisper of a rumour that we may soon see some form of press release from our friends at HMRC suggesting that as part of their policing of the DOTAS regime, certain agency arrangements that create a tax advantage "should be" DOTAS registered.

    Obvious advantage is that it opens the door to APN.

    Watch this space.
    "should be" is not quite the same as "must be".
    Still a tad scary.

    Comment


      #3
      Originally posted by jbryce View Post
      "should be" is not quite the same as "must be".
      Still a tad scary.
      Remember that the APN rules apply to "disclosable" schemes rather than "disclosed".

      If HMRC consider that an agency arrangement is "disclosable = should be", then they have the ability to issue an SRN and then probably an APN.

      Comment


        #4
        "certain agency arrangements"

        What could those possibly be

        The nuclear option would be - getting paid via a PSC and not operating IR35.

        Can't imagine it's that, but if it is - expect a sudden surge of interest in this thread.

        Comment


          #5
          This is something that I've used in a reply to a message.

          This is the simple version. I suggest that some clever people out there can make improvements to this, especially if you are a non UK domiciled individual just working here for a short period.

          Let's say you join an agency and that agency offers to deal with your time sheets and expenses claims etc - a bit like an umbrella company.

          The agency secures you a position at the London office of a multinational company.

          That company has its headquarters in say the US and runs its European operations out of Jersey/Lux/Netherlands.

          The agency agrees that the London office will pay the expenses on your contract but the Jersey office will contract with them (as your agent) for the salary element.

          The agent and Jersey Co agree that rather than pay a salary, they will make a loan from one to the other and the agency makes a loan to you.

          The salary is the paid only at the end of the contract.

          You have a tax advantage because you have delayed paying tax for a period.

          HMRC consider that to be within DOTAS.

          Comment


            #6
            Ok, so the agency is actively involved way more than simply LtdCo/divs/IR35

            I could see people being suckered into such arrangements more than the other schemes - because it involves the active participation of the agency and end client, which somehow feels a bit safer.

            I wonder what's in it for Agency/ClientCo - maybe there is a tax advantage to them as well - also it makes the day rates on offer to the contractor more competitive.

            Comment


              #7
              Originally posted by centurian View Post
              Ok, so the agency is actively involved way more than simply LtdCo/divs/IR35

              I could see people being suckered into such arrangements more than the other schemes - because it involves the active participation of the agency and end client, which somehow feels a bit safer.

              I wonder what's in it for Agency/ClientCo - maybe there is a tax advantage to them as well - also it makes the day rates on offer to the contractor more competitive.
              Like I said, the few lines of explanation are not meant to be a comprehensive picture of where your imagination can go with this.

              HMRC's concern is that there is nobody in the line of fire for making a DOTAS declaration and as such these sort of schemes are going under the radar.

              I can see at least 5 potential tax problems in the sketch I put up but also at least one strong reason why s 739 would not operate.

              Comment


                #8
                Originally posted by Rob79 View Post
                HMRC's concern is that there is nobody in the line of fire for making a DOTAS declaration and as such these sort of schemes are going under the radar.
                And given that the aim of APNs is to seemingly shoot down every single blip on the radar - it's only natural that most schemes will now try and fly under it.

                Comment


                  #9
                  Originally posted by Rob79 View Post
                  Remember that the APN rules apply to "disclosable" schemes rather than "disclosed".

                  If HMRC consider that an agency arrangement is "disclosable = should be", then they have the ability to issue an SRN and then probably an APN.
                  But this means they can apply it to anything that realises a tax advantage as they can decide what is disclosable without recourse to the tax courts.

                  I see they are about to strip schemes of the ability to avoid DOTAS using grand-fathering which probably means that all schemes - including those trying to fly under the radar - are about to fall within HMRCs interpretation of 'disclosable'. Will they apply all of this retrospectively as well?

                  Comment


                    #10
                    Originally posted by jbryce View Post
                    But this means they can apply it to anything that realises a tax advantage as they can decide what is disclosable without recourse to the tax courts.

                    I see they are about to strip schemes of the ability to avoid DOTAS using grand-fathering which probably means that all schemes - including those trying to fly under the radar - are about to fall within HMRCs interpretation of 'disclosable'. Will they apply all of this retrospectively as well?
                    I think by using "disclosable", meaning should have been disclosed even if in fact it wasn't, allows HMRC to look at schemes from the past and decide that an SRN is due.

                    Is that retrospection?

                    It may feel like that but I suggest is legally not.

                    Just assume that nothing is safe.

                    Comment

                    Working...
                    X