HMRC - Onshore_employment_intermediaries_-_false_self_employment.pdf

[IR35 Avoider]

I am not up to speed on this at all, but it seems logical to me that the party to foot any bill is the one that has made a payment to the individual that isn't subject to PAYE, for example the PSC that has paid a dividend.

[malvolio]

You're losing sight of the stated objective, which is to address forced incorporation of low paid workers in order to save money and the overheads of employment rights. It's nothing to do with taxes; that's only happening because whoever drafted this crock of beans hasn't understood their brief or the business they are regulating and has gold-plated the whole thing. That's the basis on which it will be challenged; that the scope is far wider than it needs to be.

[Zero Liability]

Agreed.

I am not up to speed on this at all, but it seems logical to me that the party to foot any bill is the one that has made a payment to the individual that isn't subject to PAYE, for example the PSC that has paid a dividend.

It would seem the burden may fall on agencies where they are involved and there is D&C. Rather it be on them than the PSC.

[malvolio]

Agreed.



It would seem the burden may fall on agencies where they are involved and there is D&C. Rather it be on them than the PSC.

An you think they are going to pick up the additional costs...??

[Zero Liability]

If their business model were geared to ensuring the client did not exercise significant D&C, they would not have to, but given how they currently operate I would guess not.

[Turfer]

PSC can be an agency

Anybody that thinks a PSC direct to a client will be outside the scope of this legislation needs to think more carefully.

It talks about an "agency", but an "agency" is simply defined as somebody other than the individual that has a contract with the client. As such a PSC will be an agency, so even where there is only a PSC you will need to make sure there is no direction, supervision or control.

Where there is direction, supervision or control the only thing that could be outside the scope of this legislation is a person that is self-employed directly to the client.

The only thing you can say is that when it is PSC direct to client there is a far greater chance that the PSC will be more comfortable with the risk and take steps to avoid it.

[cojak]

Ah well, I guess losing the divis, getting a reasonable salary and shoving all the rest in a pension is the way to go for 2014.

So a Happy New Year to all but Turfer, who has been a joyful little fecker and almost bringing himself off at the prospect of telling everyone 'I told you so' come April (as I'm sure he will).

[Graham1967]

Hi All,

Long time lurker so I thought I'd like some advice on this.

I work through my own limited company and the chap who sits opposite me works through the Umbrella,

He has been informed by his umbrella that the although only a proposal, if it is enshrined into law then he and many other will not be affected, as he is not self employed.

If HMRC are saying the intermediary will have to run the PAYE system and stop tax and NI at source, i,e the agency, then what will be the requirement of the Umbrella, pay them to do your allowable expenses, the whole thing does not make sense and appears to have been thought up with the intended consequences.

Graham

[Graham1967]

Also forgot to add,

The following is also being said, does this reinforce my point over the requirement for an Umbrella?

These workers will face higher tax and NIC liabilities, but will no longer be
paying service charges (which can be as high as £1,250 per year) to an
intermediary company. Some workers will gain overall although for others
there will be a net loss.

[GB9]

Also forgot to add,

The following is also being said, does this reinforce my point over the requirement for an Umbrella?

These workers will face higher tax and NIC liabilities, but will no longer be
paying service charges (which can be as high as £1,250 per year) to an
intermediary company. Some workers will gain overall although for others
there will be a net loss.

Not sure why they would face higher tax liabilities, however, if agencies had to run everyone through their own payroll, I can't see any reason for umbrellas to exist. A silver lining in every cloud eh!

Having said that, many smaller agencies wouldn't or couldn't handle running a payroll and would outsource it to someone else. Probably an off-shore firm, thus ensuring yet fewer jobs for UK workers and a reduction in tax take. All very sensible of course :-)