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  1. #1

    Ddraig Goch


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    Default Payroll service for IR35 PS

    Just started an inside PS contract....

    Obviously, someone has now got to do the payroll side of things. Agency won't do (I expect this is a common thread!) and insisted either umbrella or a payroll solution.

    I was hoping to still run through my ltd but, in the end, it had to get sorted so I signed up for umbrella for now.

    Still hoping I can get something sorted though for next extension. Any suggestions?
    Rhyddid i lofnod psychocandy!!!!

  2. #2

    Nice But Dim

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    Quote Originally Posted by psychocandy View Post
    Just started an inside PS contract....

    Obviously, someone has now got to do the payroll side of things. Agency won't do (I expect this is a common thread!) and insisted either umbrella or a payroll solution.

    I was hoping to still run through my ltd but, in the end, it had to get sorted so I signed up for umbrella for now.

    Still hoping I can get something sorted though for next extension. Any suggestions?
    Does your accountant not run your payroll for you for Ltd. contracts? Or do you not take a salary? No reason they could not do it once you give them the relevant info. Provided the correct Tax NI is paid HMRC don't care who does it. You could even do it yourself i you felt so inclined.
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    My post count is Majestic

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    What makes you think they'll change their stance come renewal?
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  4. #4

    Faqqed Off

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    If only this kind of thing had been mentioned in an FAQ somewhere...

    So what you are after is to pay someone else to do the payroll and calculations - the agency pays them gross, they do the calculations and pass the net payment to you and the rest of the money to HMRC. Someone has to deduct that money from the gross invoice or you're breaking the law.

    So what you're looking for is an umbrella company that allows you to use your limited company and gives you less benefits and fewer opportunities to make any kind of tax saving
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  5. #5

    Ddraig Goch


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    Quote Originally Posted by TheFaQQer View Post
    If only this kind of thing had been mentioned in an FAQ somewhere...

    So what you are after is to pay someone else to do the payroll and calculations - the agency pays them gross, they do the calculations and pass the net payment to you and the rest of the money to HMRC. Someone has to deduct that money from the gross invoice or you're breaking the law.

    So what you're looking for is an umbrella company that allows you to use your limited company and gives you less benefits and fewer opportunities to make any kind of tax saving
    Yes already read that....
    Rhyddid i lofnod psychocandy!!!!

  6. #6

    Fingers like lightning

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    Quote Originally Posted by DaveB View Post
    Does your accountant not run your payroll for you for Ltd. contracts? Or do you not take a salary? No reason they could not do it once you give them the relevant info. Provided the correct Tax NI is paid HMRC don't care who does it. You could even do it yourself i you felt so inclined.

    Is it down to whether the agency (who as engager, if I understand things correctly, is legally obliged to ensure the correct tax is being paid under the new rules) will accept offloading it to the Ltd's accountant rather than take the easy option of attempting to force the contractor via their own preferred method (e.g. umbrella that may or may not be 'doing a deal' with the agency to get all the business)?
    Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

  7. #7

    Faqqed Off

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    Quote Originally Posted by Hobosapien View Post
    Is it down to whether the agency (who as engager, if I understand things correctly, is legally obliged to ensure the correct tax is being paid under the new rules) will accept offloading it to the Ltd's accountant rather than take the easy option of attempting to force the contractor via their own preferred method (e.g. umbrella that may or may not be 'doing a deal' with the agency to get all the business)?
    Inside IR35 in public sector, the fee payer must make the calculation and deduct the tax before paying net to the contractor.

    Which is why trying to involve a payroll company is just stupid because you're going to pay someone else to receive the gross amount from the agent / client, calculate and deduct the tax and pay the net amount to your company. Kind of like an umbrella really, but paying the limited company rather than the individual - it adds no benefit.
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  8. #8

    Fingers like lightning

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    Quote Originally Posted by TheFaQQer View Post
    Inside IR35 in public sector, the fee payer must make the calculation and deduct the tax before paying net to the contractor.

    Which is why trying to involve a payroll company is just stupid because you're going to pay someone else to receive the gross amount from the agent / client, calculate and deduct the tax and pay the net amount to your company. Kind of like an umbrella really, but paying the limited company rather than the individual - it adds no benefit.

    I find it interesting as I am already paying my accountant to handle payroll for the quarterly RTI aspect that HMRC require, so in theory my accountant could handle this at no or little extra cost instead of using a brolly if the agency accepted it and I was sure I wanted to continue contracting via my LTD for the contract.

    Just something else for me to look into if I go down the 'return to public sector inside IR35' path.
    Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

  9. #9

    Faqqed Off

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    Quote Originally Posted by Hobosapien View Post
    I find it interesting as I am already paying my accountant to handle payroll for the quarterly RTI aspect that HMRC require, so in theory my accountant could handle this at no or little extra cost instead of using a brolly if the agency accepted it and I was sure I wanted to continue contracting via my LTD for the contract.

    Just something else for me to look into if I go down the 'return to public sector inside IR35' path.
    Your accountant can only do it if they become the fee payer, with a contract between them and the agency / client. That means that they have to accept the liability for the person making the assessment of your IR35 status getting it right.

    Which isn't going to happen. If you want to use your own limited (and I would really question why that would make sense) then you need to persuade the agency to deal with your company - some agencies will be willing to do that, but as I wrote in the FAQ I suspect that many will not want that hassle for the (utter lack of) benefit that they would get from the arrangement.
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  10. #10
    b r
    b r is offline

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    Which isn't going to happen. If you want to use your own limited (and I would really question why that would make sense) then you need to persuade the agency to deal with your company - some agencies will be willing to do that, but as I wrote in the FAQ I suspect that many will not want that hassle for the (utter lack of) benefit that they would get from the arrangement.
    I'm slightly confused.

    The PS (or their agency) pays your Limited Company invoice net of taxes/NI etc - that is their statutory role, and they also inform HMRC via RTI.

    You then pay yourself this net figure and stick it into your accounts/spreadsheet.

    At year-end your Accountant (or you) completes a self-assessment and sends off to HMRC.

    Or am I totally wrong?

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