HMRC lose ir35 case

[VectraMan]

Yes all brollys where you are an employee of the brolly

Of course they actually pay it out of the fees you generate - but that wasn't the question

There is no double NI. People only think that because they aren't aware of the employer's NI part of their personal tax in permiedom so they fail to take it into account when they go contracting.

What they need is an upper limit for Employer's NI similar to that of the employee's NI. Then there'd be little point.

Or just slap NI on dividends.

[beaker]

There is no double NI. People only think that because they aren't aware of the employer's NI part of their personal tax in permiedom so they fail to take it into account when they go contracting.

What they need is an upper limit for Employer's NI similar to that of the employee's NI. Then there'd be little point.

Or just slap NI on dividends.

My last place offered to put me on the payroll, which I understand to mean they would pay employers' NI and it wouldn't be taken out of my gross by my previous umbrella company. But they only offered this to them after I said I was leaving! Pah!

[beaker]

The best way around all this nonsense I suppose is to hike your rate up as much as possible and don't worry too much about all the tax you pay...

[ASB]

There is no double NI. People only think that because they aren't aware of the employer's NI part of their personal tax in permiedom so they fail to take it into account when they go contracting.

What they need is an upper limit for Employer's NI similar to that of the employee's NI. Then there'd be little point.

Or just slap NI on dividends.

I don't see it as "double NI" myself. A lot seem to and I think that view is simply erroneous.

But, regarding the limit on employers NI. I'd like to say the current mob are simply recycling old taxes. In this case the upper limit was actually abolished by Nigel Lawson when he was chancellor.

I think it raises about 20 bln now.

[NotAllThere]

What they need is an upper limit for Employer's NI similar to that of the employee's NI...

Or just slap NI on dividends.

Simpler just to abolish NI and up income tax to compensate. But won't be done because:

1) Most permies have no idea about ernic - which is effectively a tax on employment.

2) Most people thing that NI payments go into some kind of insurance scheme, rather than the general taxation pot.

[Denny]

Do any umbrella or EB companies pay the employer's NI for you?

No but they should, in my view. The rates aren't necessarily that high to cover the employers NI and fees are determined by the market, not costs incurred to your business. Most importantly, if you use a brolly you lose control because you have to sign their terms to operate through them so they can think and act independently of your directions and can even act against your best interests if they feel they could lose business by doing so. Also brollies are more interested in keeping the EBs happy than the contractors because they act as a useful referral service and strangly enough, could be on their PSL too. This is odd considering we are supposed to be their client paying them for the service not the EB. But because the payment flow is from EB to brolly it doens't work that way in practice. So the EB gets to direct and control how we run our business using a third party supplier, in effect. Therefore, the brolly is unlikely to challenge an EB that has defaulted in their service in some way.

[Bumfluff]

After a good few years contracting I recon this year I will be looked at for IR35, my accountant made some errors on my accounts this year I didnt spot be they went in, nothing major but I recon it will be enough for them to have a look, just got a feeling and usually my instincts are right. To be honest Ive pretty much had enough of the constant looking over my shoulder and 'Im going permy' after this gig finished.

Screw Brown and HRMC, they dont even realise that they get more £ from me as a contractor in tax, VAT etc than they will be getting from as permy,
so ******* pointless. Makes me so angry they preach all this sh*t yet the MP's have this massive expenses allowance, housing allowances and can do what they want. This country is f*cked up, if you get off your arse and make something of yourself the government screws you.

[Hiram King Of Tyre]

Out of interest, if you do get caught as “inside” when you did everything possible to ensure you were “outside”, if you have substantial savings, can you opt to pay them into a pension so that you avoid being responsible for a staggering amount of back PAYE tax & NI?

[Ardesco]

Screw Brown and HRMC, they dont even realise that they get more £ from me as a contractor in tax, VAT etc than they will be getting from as permy,
so ******* pointless. Makes me so angry they preach all this sh*t yet the MP's have this massive expenses allowance, housing allowances and can do what they want. This country is f*cked up, if you get off your arse and make something of yourself the government screws you.

It's about control, not making money. Look how much money this government has pissed up the wall and how much debt they have got the country into... They just want to control as many aspects of your life as possible so that you get used to doing what you are told and tow the line.

Contractors rarely tow the line without making a fuss, which isn't the sort of person they want in then new britain comrade!!!

[ASB]

No but they should, in my view. The rates aren't necessarily that high to cover the employers NI and fees are determined by the market, not costs incurred to your business. Most importantly, if you use a brolly you lose control because you have to sign their terms to operate through them so they can think and act independently of your directions and can even act against your best interests if they feel they could lose business by not doing so. Also brollies are more interested in keeping the EBs happy than the contractors becaus they act as a useful referral service, so they are unlikely to challenge an EB that has defaulted in their service in some way.

Actually it might be interesting for a brolly user to challenge. I would be quite interested to hear what Lisa thinks.

By law the only people who pay employers NI are oddly enough employers. Now if the contract you signed says "20 quid a week fees" and they then proceed to deduct 20 quid and employers NI you have maybe got a case for breach of contract.

If however the contract says "fees 20 quid, plus an amount equivalent to the employers national insurance we have to stump up" then it's fine.

I suspect some umbrellas might be on a sticky wicket if anybody chose to challenge them.

This also leads to a side issue which is nearly on topic of the original post. IR35 is a personal tax. If the company refuses it's assessment the liability ultimately gets transferred to the individual. However there is a reasonable body of opinion that says the employers NI Portion is not going to stick if challenged by the taxpayer.