BN66 - Time to fight back!!!

[poppy01]

Or just run a normal LtdCo and ensure you are outside IR35 perhaps?

The snag with your scenario is what used to be called S134c: the agency is liable if you don't pay your taxes, hence the need for the intermediary company. You can go SE if you don't need tio use an agency and if your client is willing to accept the risk of being stuck with your tax bill. So that'll be a no then...

that is what I'm doing, but do hmrc actually believe any of us is truly outside ir35, what are they planning for us next?

[ASB]

Does anyone know why we were able to operate as self-employed under MTM, but arent allowed to in a 'normal' fashion like a plumber or whatever. The big problem with ir35 has always been first we pay employers and employees nic's without (in hmrc's view) being an employer (nobody else has to do this) , and two we cant claim legitimate business expenses. wouldnt genuine self-empoyment be the most sensible option...removes dividends but just 'seems' fairer, more people would probably go along with it

To expand a little on what mal said.

You are allowed to operate as self employed through an agency or direct in the normal manner. By allowed I mean there is no legal barrier - although it may be that with the recent agency regs this is a barrier.

What generally happens is that the agency will choose not to deal with somebody as self employed because of the possibility of a status enquiry. In this case you are either self employed or the agencys employee.

Mal also mentioned that there is the old bit of s134 which could also make the agency liable even if you were self employed (genuinely) but decided to not pay taxes.

Similar legislation seems to be arriving in a wider form to transfer liabilities in other cases.

[poppy01]

To expand a little on what mal said.

You are allowed to operate as self employed through an agency or direct in the normal manner. By allowed I mean there is no legal barrier - although it may be that with the recent agency regs this is a barrier.

What generally happens is that the agency will choose not to deal with somebody as self employed because of the possibility of a status enquiry. In this case you are either self employed or the agencys employee.

Mal also mentioned that there is the old bit of s134 which could also make the agency liable even if you were self employed (genuinely) but decided to not pay taxes.

Similar legislation seems to be arriving in a wider form to transfer liabilities in other cases.

i see, I'll think twice before hiring a plumber again

[TheBigYinJames]

i see, I'll think twice before hiring a plumber again

I use the plumber analogy often to agents when they ask me to do one of their stupid multiple choice phone tests to make sure I know how to program dotNet. I ask them if they ask a plumber some simple plumbing questions before he fixes their boiler. Read my CV, I make a living out of this, and have done for years.

[malvolio]

i see, I'll think twice before hiring a plumber again

That's rather the point though. He's seen as genuinely self employed by Hector because he has several consecutive clients, usually one at a time whereas we contractors have several consecutive clients, usually one at a time...

In strict reality, he offers exactly the same risk to his "employer" were he to default on his tax. The only real difference is that he won't have signed a pretendy contract of non-employment with you, so there's no evidence of a master/sevant relationship so he is working on a B2B basis. If the agencies and the clients could get their collective heads around this simple solution, we wouldn't need IR35 at all.

Confusing, isn't it.

[smalldog]

That's rather the point though. He's seen as genuinely self employed by Hector because he has several consecutive clients, usually one at a time whereas we contractors have several consecutive clients, usually one at a time...

In strict reality, he offers exactly the same risk to his "employer" were he to default on his tax. The only real difference is that he won't have signed a pretendy contract of non-employment with you, so there's no evidence of a master/sevant relationship so he is working on a B2B basis. If the agencies and the clients could get their collective heads around this simple solution, we wouldn't need IR35 at all.

Confusing, isn't it.

Can we not turn this into yet another IR35 thread....

[DonkeyRhubarb]

I never could quite understand how we could legitimately act as "sole traders" in the scheme, when we had to sign a contract to supply services to the partnership. I assumed it was some kind of technicality because the partnership was based offshore but it did strike me as a bit odd at the time.

However, I think we might be getting off the point here. At no time over the past 5 years have I had the slightest impression that HMRC is going after anyone but us as individual tax payers. Clause 55 is specifically designed to target us as benificiaries of the trust, after all we are the recipients of the money.

[DonkeyRhubarb]

seems obvious to me they want to asses the total income generated in the uk, that includes all fees paid over to Montpelier.

But aren't the fees paid to Montp just the same as the cut agencies take? We can't be assessed for tax/nic on money we never received. Or wasn't this what you meant?

[Grim Reaper]

Is anyone on here that is not using MTM anymore, still registered as self employed but is simply no longer paying into the scheme ?

[smalldog]

i registered as employed in Jan 08 so no to your question...very interesting point about fees paid to Montp, all the fees I paid over the years cant be taxable, as you say it was never received. That will take a nice lump off any eventual bill.