The Official Budget 2016 thread

[jamesbrown]

What if you are not directly contracting in public sector and go through one of the consultancies like accidenture et. al.
Do you still have to use PAYE ?

Almost certainly, yes (assuming you are caught, which should not be assumed at this stage). They mention agencies and third parties. This would be a third party. The focus is on the end client that benefits from the services.

[DaveB]

What if you are not directly contracting in public sector and go through one of the consultancies like accidenture et. al.
Do you still have to use PAYE ?

No, because the client will be treating you as an Accidenture body not a contractor they have recruited themselves. They will be paying Accidenture for consultancy services not specifically for your services.

[SimonMac]

No, because the client will be treating you as an Accidenture body not a contractor they have recruited themselves. They will be paying Accidenture for consultancy services not specifically for your services.

I think that is then going to be the workround, tax payers will pay more for the added over head but continuity will prevail

[jamesbrown]

No, because the client will be treating you as an Accidenture body not a contractor they have recruited themselves. They will be paying Accidenture for consultancy services not specifically for your services.

I think this is going to be an example of a "third party". I can't imagine what else they'd mean by this. They talk about the nearest company in the chain being responsible so, in this example, I think the consultancy would be responsible if they contracted with a PSC. Indeed, if that weren't the case, it would be a fairly straightforward workaround to avoid the rules based on a distinction between an agency and a consultancy (which they aren't going to make).

[jamesbrown]

I think that is then going to be the workround, tax payers will pay more for the added over head but continuity will prevail

It won't be for precisely that reason. They talk about third parties, not just direct contracts and agencies.

[SueEllen]

I think this is going to be an example of a "third party". I can't imagine what else they'd mean by this. They talk about the nearest company in the chain being responsible so, in this example, I think the consultancy would be responsible if they contracted with a PSC. Indeed, if that weren't the case, it would be a fairly straightforward workaround to avoid the rules based on a distinction between an agency and a consultancy (which they aren't going to make).

But if there is contractor's company -> agency -> consultancy/supplier -> government department then only if the government department is told you aren't consultancy/supplier staff can they do anything.

Also since lots of companies provide services to government departments off-site, so it becomes ridiculous.

[Waldorf]

And once again one para for T&S clarification:

2.39
Employment intermediaries and relief for travel and subsistence
– As announced at March Budget 2015, the government will introduce legislation in Finance Bill 2016 to restrict tax relief for home to work travel and subsistence expenses for workers engaged through an employment intermediary. This will bring the rules into line with those that apply to employees. (Finance Bill 2016)

Looking out for the HMRC notes now

So doesn't 'Employment intermediaries' also cover limited company contractors, as well as brollies? So does this mean our T&S claims will also cease?

[NorthWestPerm2Contr]

By increasing the 40% tax band to 45k, are the government trying to ease the pain of the dividend tax? for somebody on 45k this year compared to 45k in 2 years is about the same now..... give with one hand and take with the other.

[SueEllen]

By increasing the 40% tax band to 45k, are the government trying to ease the pain of the dividend tax? for somebody on 45k this year compared to 45k in 2 years is about the same now..... give with one hand and take with the other.

You weren't suppose to work that out.....

[lucyclarityumbrella]

We have received this off our contact this afternoon at HMRC with regards to the Reform of the Intermediaries Legislation...

"We wanted to contact you directly about the announcement today in the Budget about the intermediaries legislation (known as IR35) which we know is of interest to you, and to thank you for your engagement with the discussion document we published last Summer on how to improve the effectiveness of the current rules.

As you may have seen, the Government announced at the Budget that it will reform the intermediaries legislation for public sector engagements. Liability to pay the correct employment taxes will move from the worker’s own company to the public sector body or agency or third party paying that company.

We thought it might be helpful to provide you with some more information about the change. The government has decided to reform the rules for the engagements in the public sector only from April 2017. Public sector bodies have a responsibility to taxpayers to ensure that the people working for them are paying the right tax.

We have published a short technical note to provide more information about the changes and we will publish a consultation before the summer. We will continue to talk with you and other stakeholders over the summer on the best way to implement this reform."