Advice on move from permie to contracting?

[eek]

The fee payer is responsible for deducting tax and NI, that is not always the client. In most cases it'll be the agency. Ultimately the client is liable but only if entities further down the chain don't do their jobs properly.

Yes tax on an inside £800 p/day gig will be high but what's bad about that if you've never had a contract job before? Outside roles are going to be hard to find until the market corrects itself so your advice is pretty rubbish guidance for a first time contractor.

Responsibility will always be with the agency unless they delegate it to the umbrella company (except in some weird circumstances there is zero need to cover here).

And a new contractor isn't going to need £100,000 + to live on as they won't got used to years of high living so will probably just massively increase their pension contributions while still enjoying a better lifestyle.

[Fraidycat]

The fee payer is responsible for deducting tax and NI, that is not always the client. In most cases it'll be the agency. Ultimately the client is liable but only if entities further down the chain don't do their jobs properly.

I never said who is responsible for deducting tax and NICs.

I said who is liable if any outside IR35 determination is successfully challenged by HMRC?

[eek]

I never said who is responsible for deducting tax and NICs.

I said who is liable if any outside IR35 determination is successfully challenged by HMRC?

From April 2021 the agency / end client - it won't be the contractor unless the agency can demonstrate deliberate lies by the worker...

[Fraidycat]

From April 2021 the agency / end client - it won't be the contractor unless the agency can demonstrate deliberate lies by the worker...

But exactly who will HMRC go after first, i.e. who gets the tax demand/fine first?

The client or the agency?

For the case when any outside determination was proved to be incorrect.

[jamesbrown]

But exactly who will HMRC go after first, i.e. who gets the underpaid tax demand first?

The client or the agency?

It depends where the fault lies, i.e., the rules envisage obligation-based liability. If the client fails to provide a timely SDS or take reasonable care, the client (they are now the Fee Payer). If the Fee Payer (who isn’t the end client) fails to transmit the SDS or make correct deductions, then they are liable. The last intermediary above the PSC is the Fee Payer by default, but transmission of the SDS is like pass the parcel. If you get stuck with it, you are the Fee Payer. If the worker engages in fraud, then the worker’s intermediary and potentially the worker becomes liable. If the supply chain is fully overseas or the client is a small business, then the worker’s intermediary is liable and potentially the worker if fraud is involved (as now). The entire supply chain is at risk, but the Fee Payer, in particular (bearing in mind this role can be transferred upwards from the default position).

[jamesbrown]

Oh, and there are transfer of debt provisions too.