Hays contract: PSCToASR_02-12

[LisaContractorUmbrella]

In the calculator part of the website it says if you are caught by IR35 your income would be decreased by x amount. What does it mean? Do people voluntarily advise their accountant they are inside IR35 ? Otherwise Isnt it that if they are caught there would be tens of thousands of pounds tax and fine etc.

My contract rate seems too good to be missed. I don't want to miss it over a worry that perhaps most people easily deal with by buying an insurance or PCG+ cover or similar.
What are my options if people say Hays doesn't change the contract?

Thanks

If your working practices dictate that you are inside IR35 i.e. there is a mutuality of obligation, you are required to perform services personally and cannot provide a substitute and you are under the supervision, direction and control of the end client then, essentially, your earnings will be subject to PAYE tax and NI. If you have a Ltd Co then, as both employer and employee, you will pay income tax and both employee's and employer's national insurance contributions. If your working practices put you outside IR35 i.e. you are in business on your own account then you would be entitled to draw dividends from your Ltd Co which do not attract national insurance contributions; you would be liable to pay income tax on profits but your 'take home' pay would still be higher (increased by x) than if you were inside IR35

HTH

[malvolio]

If your working practices dictate that you are inside IR35 i.e. there is a mutuality of obligation, you are required to perform services personally and cannot provide a substitute and you are under the supervision, direction and control of the end client then, essentially, your earnings will be subject to PAYE tax and NI. If you have a Ltd Co then, as both employer and employee, you will pay income tax and both employee's and employer's national insurance contributions. If your working practices put you outside IR35 i.e. you are in business on your own account then you would be entitled to draw dividends from your Ltd Co which do not attract national insurance contributions; you would be liable to pay income tax on profits but your 'take home' pay would still be higher (increased by x) than if you were inside IR35

HTH

Just to be pedantic (who, me??) you can still draw dividends from YourCo even if inside IR35, it's just that there won't be any profits to draw them from. That's the real iniquity of IR35, it prevents you using the company as a vehicle for ensuring you can get paid when you have no work, and the ability to do that is partly why we charge what we do.

[eek]

Just to be pedantic (who, me??) you can still draw dividends from YourCo even if inside IR35, it's just that there won't be any profits to draw them from. That's the real iniquity of IR35, it prevents you using the company as a vehicle for ensuring you can get paid when you have no work, and the ability to do that is partly why we charge what we do.

But in HMRCs viewpoint that is not a flaw in IR35 because you are an "employee" of the company and will therefore be there forever. The fact we are not there forever and are merely specialist (albeit expensive) resources hired only when required seems to pass them by.

[andyg]

Are you working with IBM?

Hiya

I've just finished a contract with Hays and I must say they were pretty good. Paid weeekly, never any delay on payment. I worked through Hays for IBM and asked for a couple of changes to the contract which when Hays said no, I just went to IB who then forced them to make the changes.

If you are working for IBM be aware that they will add a furlough into the contract which they di enforce.

[Dominic Connor]

Almost but not completely unlike James Bond

Last week I had a bit of a James Bond moment with the MD of Randstad who own Hays. I was invited onto their yacht for them to be curiously nice to me and we had a nice chat and for entertainment we had a guy from their F1 team explain their stuff.

Part of me kept expecting the tour of the boat to lead to a plank or a tank of mutant piranhas.

Are Hays more or less evil than the average large agency ?

[cojak]

Last week I had a bit of a James Bond moment with the MD of Randstad who own Hays. I was invited onto their yacht for them to be curiously nice to me and we had a nice chat and for entertainment we had a guy from their F1 team explain their stuff.

Part of me kept expecting the tour of the boat to lead to a plank or a tank of mutant piranhas.

Are Hays more or less evil than the average large agency ?

They just hire a savvy PR firm and give them a bigger budget than the others.

F1 team... I'll bet Andy H is green with envy at that one!

[bobspud]

Last week I had a bit of a James Bond moment with the MD of Randstad who own Hays. I was invited onto their yacht for them to be curiously nice to me and we had a nice chat and for entertainment we had a guy from their F1 team explain their stuff.

Part of me kept expecting the tour of the boat to lead to a plank or a tank of mutant piranhas.

Are Hays more or less evil than the average large agency ?

No they are not evil they just don't know or care about the market they operate in further more their teams don't care or understand when you point out the problems they are causing. The result of this is hundreds if not thousands of IT contractors putting themselves at risk of IR35 investigations and Hays denying the problems with the contracts they have used. It doesn't need to be like that.

So as a result they are getting the fair PR they deserve in the market they hope to attract talent from.

Even Capita understand the basics of IR35. But clearly from the contract version named in this thread Hays do not...

If the MD wants the full story you can happily supply this link and we will explain.

[Archangel]

In all my years I have never met a single contractor who had a skirmish with ir 35. the advice I had form very senior accountant was that none of the measures such as decribed here remove you from ir 35 or even necessarily help. If HMRC decide to pursue you they will almost certainly win unless you have a very large stache to fight them with and are willing to loose it. If they dont you have no problem anyhow so stop fretting


Lots of people talk on these forums as though there is a type of contract etc. Not true.
Every contract is an agreement between 2 entities. It is up to you what you acccept. They will not throw away a good contract unless you are really shafting them. Just insisting on fair play wont stop them.
If you are prepared to walk away, then surely you are prepared to stand and fight.

I'm tired now. Work to be done

At one of my clients another contractor and I both were subject to separate ir35 investigations.

Fortunately we both had insurance to pay the bills (via pcg, ta very much), after a couple of years for me (less for him) we were both told "no further action at this time" which is as near to "you're outside" as you are going to get from hmrc.

Personally I think the hays contract puts you inside, unless the working practices are very different. If the contract is only for say 3 months, then I'd take it, and pay all the income as salary for that contract, then pay no more salary for the rest of the 9 months of the tax year on subsequent contracts. That way you'll have (figures not necessarily accurate,) say 10k tax free (pers allowance) and then the balance of the 40% tax band before you're much worse off (other than maybe 4k NI). Don't let the ir35 tail wag the income dog.

P.s. I don't have a 'stache, loose or tight

[eek]

At one of my clients another contractor and I both were subject to separate ir35 investigations.

Fortunately we both had insurance to pay the bills (via pcg, ta very much), after a couple of years for me (less for him) we were both told "no further action at this time" which is as near to "you're outside" as you are going to get from hmrc.

Personally I think the hays contract puts you inside, unless the working practices are very different. If the contract is only for say 3 months, then I'd take it, and pay all the income as salary for that contract, then pay no more salary for the rest of the 9 months of the tax year on subsequent contracts. That way you'll have (figures not necessarily accurate,) say 10k tax free (pers allowance) and then the balance of the 40% tax band before you're much worse off (other than maybe 4k NI). Don't let the ir35 tail wag the income dog.

P.s. I don't have a 'stache, loose or tight

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