IR35, Umbrellas and HMC&R

[Contractor Messiah]

Poor Soul

Denny

I would suggest you check out more umbrellas.

Some are actually very, very good, with no sign on fee's, break out clauses, and actually a very cheap fee.

Regarding Employers Tax, if you fall inside IR35, you have to pay it period!!!! And pay 12.8% you do!!!!!!!

[G8_Summit]

Contractor Messiah

Contractor Messiah, the evidence is all there. You consistently and religiously spout cr@p. You are Chico - I claim my 5 pounds.

[Robot]

Before everyone else shouts it - you can't get back more than you've paid out in expenses. This subsistence thing just means that the umbrella doesn't need to report to the Revenue that they've paid you certain expenses.

Bradley

This is absolutely 100% correct........but no one ever listens!

The booklet 490 9.6 - Round Sum Allowances

If an emloyer (employer on this occassion is your umbrella company) pays an employee a round sum allowance for business travel (travel includes subsistence), it is not regarded as a reimbursement of actual expenditure incurred. The whole of the allowance should be treated as gross pay for PAYE purposes.

Now Contractor Messiah, I am sure the IR would cut a deal with you, you show me your receipts and I'll add up all the round sum allowances you have taken and we will take one away from the other and you pay me the tax on the difference + Penalties and interest...........Sorry Mr Contractor Messiah you have not kept any receipts, why would that be? Cause my employer told me not to..............


Mr Brown will be 'lovin it'.

Robot

[boredsenseless]

There is only one way to avoid all the uncertainty...

Walk up to your local HMRC office with contract in hand and say 'am I IR35 or not?'

Obviously the answer you get will be biased, but if you really are outside they will tell you. They'll even write it down for you - and then you covered.

I can see however that most people wouldn't want to do this, its a bit like going past a cop car at 33mph and then reversing back to ask if he thought you were speeding...

--- Has no-one else wondered why the HMRC are encouraging more and more to go umbrella. Its got nothing to do with the fact that at the moment they have 100,000s of companies to investigate but if they can get all them to join about 20 umbrellas then the burden of contacting all these companies goes, and they have a ready made list of people over-paying expenses. Simple calculation really - mr umbrella what is the maximum you allow your 'employees' to claim in unreceipted expenses? Oh and could you show me a print-out of names and addresses of all employees paid that amount?

And they are entitled to ask that question cos they are the Inland Revenue and they are talking to an employer to ensure they are meeting their tax liabilities and they can only do that if they have the figures.

[partimer]

IR35 again

I'm going to leave the expenses discussion well alone since I've said more than enough in the past.

These discussions get very polarised and I'm not going to take sides. Going Ltd or using a Brolly is up to the individual. Get all the facts and see what suits your particular circumstances. Don't take anybody's word, do the research - it's your money.

The Artic case does have a bearing with IR35. You would not realistically pay yourself dividends if you were inside IR35. What you do with the dividends (splitting it between you and another person) is than subject to S660a. What makes S660a so bad is that it's a reinterpretation of existing rules. No new laws. No changes. Just that the reinterpretation goes against everything we were advised for the last decade and they want to back date the tax.

If you never paid yourself a dividend (inside IR35) then S660a is not an issue. I assume that's what the guy is on about.

Back to the original discussion. You need a **proper** defence for IR35. I'm outside IR35 because I say I am, is not going to work. Don't stick your sand in the head.

What always amazes me is that many people I work with think they're outside IR35 even though I know they can't pass my noddy tests e.g.
a) Do you get **invited** to the customer's Christmas party ? (Why ? You're not an employee.)
b) Do you get training courses paid for by the customer ? (Why ? You're not an employee.)
c) Do you take advantage of Gym membership, staff discount ? (Why ? You're not an employee.)
d) Do you have the same badge/pass as an employee ? (Why ? You're not an employee.)
etc. etc.

You get my drift.
Have a proper defence whether it's a Brolly or Ltd. I know many people who use Brollies and know what they can and can't claim. They're happy with their arrangements. Generally, if you want to run a proper business, go Ltd. If you're happy to be a bum on seat contractor then use a Brolly. Obviously you can have a mixture of non-IR35/IR35 contracts which would make sense to go Ltd.

Last word. The longer you're in this business the more chance of a visit from Hector. One visit in 15 years is a great ratio in my opinion ... Better than my ratio.