Agency PSLs? (Yes agency, not client.)

[Rialto99]

Morning all,

I've just had a strange thing happen, my agency has just sent me an email announcing that they have a preferred supplier list of umbrella companies.

And, since my umbrella company is not on the list, at my next renewal, I get to either:

1. Change umbrella company,
2. start my own limited company (oh good grief, not again!), or,
3. not renew.

The eight companies they have listed on their PSL, are all large well known names in the world of accounting for contractors, but frankly as far as I can see they seem to be good at making money for themselves rather than contractors, never actually innovating new ways of doing things in the contractor's favour.

Since when did agencies get to dictate how my income is processed? I went though this nearly two decades ago*. If the agency hand off the funds to another limited company, surely that limited company is liable for unpaid taxes? Am I missing something here?

I have just been on the phone, and was informed that several ATSCO agencies are doing the same thing, on the advice of KPMG.

Anyway, the end result is that I have let them know that I will not be renewing the contract if they are going to change terms and conditions unilaterally in this regard. I am expecting a call from someone higher up the management chain.

Has anyone else met this? And if so how do you plan on dealing with it?

I shall keep you informed of progress.

-----------------------------------------------

* I seem to remember a single contractor didn't pay his tax when he was self-employed on schedule D. The revenue came after the agency for unpaid taxes. After that, all contractors had to have a limited company, in order for the agencies to have no liability in the event of non-payment of taxes by a contractor.

Which Umbrellas are on the PSL and who's your agency Chrisos?

Cheers
R

[Chrisos]

Which Umbrellas are on the PSL and who's your agency Chrisos?

Cheers
R

Umbrollies: Think big (boring) ones: Giant, Parasol, JSA, etc...

Current agency: Given the current delicate state of negotiations, I'll not answer that question just now...

[Bluebird]

I assume you're a barrister specialising in UK taxation then, with an equally valid yet differing opinion based upon my non-legally minded half-arsed interpretation and communication of the facts then? Or, did you forget your "IANAL but" prefix?



Well, since I've already said that it is not income in legal terms, and therefore not liable for income related taxes, I'm not sure where the Self Assessment part comes in. As for the form of the payments what does it matter? The point is they are legally classified as non income. Does it matter if it is a loan that does not have to be paid back, loans in a hyper-inflating currency repayed at a later date, payments into a trust located in a place with dual taxation treaty terms with UK, or Land rights for diamond mines on Mars? The point is someone who knows their shiznit regarding this stuff, says it is, in their highly qualified opinion, completely legal, and that is good enough for me.



Of course they don't indemnify me if they did, under the rules defining Managed Service Companies that would make them an MSC, and I'd be taxed up to the eyeballs.

So (SHOCK HORROR) yes I either take an educated risk or receive none of the benefits.

With reference to recent commentary on this thread and the earlier libellous and vexatious comments of a few weeks back:

I find it odd that there is so much sarcasm, innuendo and general sniping on this subject, I fail to see why anyone would not attempt to legally minimise their tax deductions.

This is no different from investment bankers minimising the tax they pay on their bonuses, or the ultra rich using all kinds of accountancy dodges to move money around to avoid taxes, all that is differing is scale of the cash involved.

At no point here, am I advocating that illegal tax evasion is acceptable, quite the opposite, I advocate and participate in what I am advised is legitimate tax avoidance.

Conclusion: I take the advice of qualified professionals in the subject areas where I am out of my depth (much like my own clients don’t make huge technical decisions based upon what they read in the margins of second hand books, they come to me, their authority on the subject). The net result is a positive financial outcome for me.

You, on the other hand, can do what you want to do; it is for you to decide what forms and levels of risk you are prepared to accept, and what levels of time and effort you are prepared to put into running a business, in return for the outcomes you want to receive. And the best bit is I'm happy for you to do that.

I wasn't having a go, only trying to help.
I don't want to see anybody get in a mess.

Take the advice or leave it.