Agency stipulating sole director ownership ltd

[eek]

Yes I dont understand how having one director is proof of being a PSC.

Surely though they are going to find a lot of us with two directors? Seems standard agency-got-no-idea again.

I certainly wouldnt change MY company setup for this. Would cost too much for starters.

At the moment, mrs gets £32K worth of dividends. If I was now unable to do this, it'd be £32K more I'd have to pay at 40%.

Too dull to work that out (17% of the extra?). About £5000 extra tax.
So I reckon £9000 or so extra income needed. £40 per day extra needed.
Sums are probably crap.

Still probably wouldn't do it. Even if you did change the company set up just for this gig, would you really want to change it all back a few months down the line? I've always understood that arsing about with the shareholdings can be a bit of a red flag.

um you seem to have shareholders and directors totally confused....

I would cover the calculations but you miss a few things out (For 1 Child Benefit rapidly becomes a problem)..

But the real killer for me is any agencies reference to a Personal Service Company. Ain't got one of those both the companies I own (contracting and plan b) merely provide services of a particular type to end clients. The person who provides those services is utterly irrelevant...

[TestMangler]

um you seem to have shareholders and directors totally confused....

I would cover the calculations but you miss a few things out (For 1 Child Benefit rapidly becomes a problem)..

But the real killer for me is any agencies reference to a Personal Service Company. Ain't got one of those both the companies I own (contracting and plan b) merely provide services of a particular type to end clients. The person who provides those services is utterly irrelevant...

Absolutely. I'm sure if you contact companies house and tell them you want to register a new 'PSC' they will tell you there is no such thing.

[Lewis]

What agency is this? or if you don't want to name names, is it big/well known or small?

I agree, lots of contractors have multiple shareholders. They're going to have a very reduced pool of people they can work with if they insist on one shareholder.

[psychocandy]

um you seem to have shareholders and directors totally confused....

I would cover the calculations but you miss a few things out (For 1 Child Benefit rapidly becomes a problem)..

But the real killer for me is any agencies reference to a Personal Service Company. Ain't got one of those both the companies I own (contracting and plan b) merely provide services of a particular type to end clients. The person who provides those services is utterly irrelevant...

True enough about Directors. Of course, also if one of you exceeds the 40% then no child benefit - even more of a loss potentially.

Yes and agreed that its best not to define yourself as such.

[eek]

Agency stipulating sole director ownership ltd

True enough about Directors. Of course, also if one of you exceeds the 40% then no child benefit - even more of a loss potentially.

Yes and agreed that its best not to define yourself as such.

Once again but not quite. You have to hit £50k before you start losing child benefit. Which probably means £37k in dividends assuming £10k salary and the 10% tax credit

[RoastedSlopes]

Once again but not quite. You have to hit £50k before you start losing child benefit. Which probably means £37k in dividends assuming £10k salary and the 10% tax credit

So just to clarify on the Child Benefit, the dividends are included as income for calculations ? And thus if nominal salary of £10k and the maximum dividends paid @10% then you will not lose benefit.

And as this limit is per parent rather than household, each shareholder (ie husband and wife) can draw the same divis.

[psychocandy]

So just to clarify on the Child Benefit, the dividends are included as income for calculations ? And thus if nominal salary of £10k and the maximum dividends paid @10% then you will not lose benefit.

And as this limit is per parent rather than household, each shareholder (ie husband and wife) can draw the same divis.

As eek corrected me yes its £50K. If you stay below the 40% then its less than £50K

Yes its per parent. Both could earn £49999.99 and be OK. Or one could earn £50000.01 and the other £1 and not be eligible.

[eek]

As eek corrected me yes its £50K. If you stay below the 40% then its less than £50K

Yes its per parent. Both could earn £49999.99 and be OK. Or one could earn £50000.01 and the other £1 and not be eligible.

It's actually £60k as while it cuts in at £50k its tapered relief up to £60k...

[TykeMerc]

So summing up......

Agents, who have absolutely no idea of how some new legislation or rules should be applied or to who they're applicable, are asking for damn silly stuff from Contractors?

[SunnyInHades]

Looks like agencies are just covering their backs. I foresee after next week's contractor hittin' budget (to be law 2016)..

1) Umbrella - no travel or other tax deductible expenses
2) PSC - no (reduced?) travel or other tax deductible expenses
3) Non PSC - full expenses, as current
4) Unpaid tax - PSC liable but agency liable if contractor working through a non PSC which can't pay

'PSC' meaningless in law the UK (at the moment) however, but something similar to the USA def may be introduced...

From Wikipedia..
1. Its principal activity during the “testing period” is performing personal services
2. Its employee-owners substantially perform the services in (1).
3. Its employee-owners own more than 10% of the fair market value of its outstanding stock on the last day of the testing period

Looks like it's time to diversify from "Contractor" to "Contractor and Recruitment Services" to become an indisputable non PSC .. frequently hire temps to copy a Job posting from Jobserve, change the wording and repost (7 days for £120)... but damn, then I'll have to vet contractors applying .. will they be PSCs, if not I'll be liable for their unpaid tax ..thinking like a recruitment agency MD now, dangerous.