Quick Question re PAYE via your PSC if Inside IR35

[DrStrange]

"Can't be done"

Are there rules against this, or is it more of "no fee payer would accept it" kind of thing?

[jamesbrown]

The idea was the PSC is an Umbrella (albeit a budget, one-man, unaccredited one)

I get how implausible this would ordinarily be, however its a special case and I have leeway which is what led to the thought.

I should probably stop there, but to indulge you...

A "PSC" that is an "umbrella" is a "PSC". As an aside, neither of these terms means much in UK law (except that a proper umbrella needs to consider more areas of legislation more carefully). What matters w/r to IR35 is that this vehicle will meet all of the basic requirements for IR35 to apply in principle, such as you owning 5% or more of the share capital. Also, your argument relies on the total ignorance of the real Fee Payer, i.e., the company paying your "shadow PSC", because they have an obligation in law (ITEPA Pt. 2, Ch. 10) to apply a deemed direct payment. Moreover, this arrangement would probably be examined very carefully under the Anti-Avoidance provisions of 61W in Ch. 10, leading to even greater risk/penalties.

[jamesbrown]

All you really need to understand is that, regardless of the structure of the supply chain above you personally, if your engagement is inside IR35, then the net effect should be that you receive the total income received from the client (deemed employer) net of all employment taxes. Anything that does not achieve this effect will place you and the supply chain above you at significant risk. The best (only sane) way to mitigate this is to work through a legitimate umbrella company and leverage their pension options.

[DrStrange]

Thanks everyone