Staying in the same public sector contract after April 2017

[SueEllen]

so far, somewhat, somehow, maybe, ifs/buts aside, partly guessing...

Best *PS only* options are:

1- If same PS - then fixed term/perm employment to avoid retro
2- If different PS - then can even do umbrella (inside ir35)

Why would 1 avoid retro?

[puzzler]

One should also not forget, we may only have limited time to do traditional contracting at private sector too. So if someone do have the capability to leave PS and join Private, then must avail the opportunity.

I see there is a global and persistent drive to retreive taxes from an individual level, so make use of any existing limited ways/means before they expire too (i mean private sector contracting)

[northernladuk]

One should also not forget, we may only have limited time to do traditional contracting at private sector too. So if someone do have the capability to leave PS and join Private, then must avail the opportunity.

I see there is a global and persistent drive to retreive taxes from an individual level, so make use of any existing limited ways/means before they expire too (i mean private sector contracting)

We've been over that point numbers times over the last 6 months. Just worry about your immediate situation first.

[uyejyen]

I’ve held off from participating in this conversation, although I’ve been following for some time now on here (long before this thread was created). I was aware of the changes although somewhat naively assumed it was a case of “oh, the employer will be responsible” and that was that.

I have had two PS contracts this year, 5 months and 4 months. Both were for the delivery of specific projects, and I’m not going to lie, probably just outside the regs. I genuinely did have a substitute ready if needed (and not the bloke sitting next to me) although of course, nothing in writing from that substitute by virtue of not ever requiring it (although it was in the contract). I did sit at a desk most days because it was easier for me, rather than being made to.

I’m not going to claim to be 100% a “real contractor” outside the regs and I guess I’m a bit worried about retrospective action, as my paperwork is fine for these contracts but no real paper trail of working practices for those contracts I’ve had for the last few years before this one.

I’ve been told by my agent that even though I’m probably outside because of the above, the PS organisations in my industry are pretty much all saying that they aren’t taking the risk, so from now on all roles will be advertised as inside.

So, I want to close down MyCo, to just save all the stress. I’ll still go perm/PAYE even in the private sector and take the hit, I can afford it. My fear though, is that this will be a red flag to HMRC. On the other hand, I don’t particularly want to keep paying accountancy fees if I can’t use it. I’m getting conflicting info from the agents (who want to convert me straight to PAYE), my accountant (whose entire customer base is ltd cos) and this board (which is slowly scaring the s*** out of me!).

I guess my question is… Do I close my ltd company, or keep it open not doing anything?

[seeourbee]

Question: say in ten years you've had ten clients. Let's say you're investigated and they deem you inside ir35 for those ten years. Who are they supposed to get the Employers NI off ?

[eek]

Question: say in ten years you've had ten clients. Let's say you're investigated and they deem you inside ir35 for those ten years. Who are they supposed to get the Employers NI off ?

The person who would responsible for not paying the correct amount of tax.

Which until April 2017 (and later still for the private sector) is you and your limited company.

[seeourbee]

But I don't pay employERs NI

[teapot418]

But I don't pay employERs NI

You do for any salary you pay above the threshold. Which is 95% of your post-expenses income if IR35 caught. (Bearing in mind T&S has not been allowed since April 16 either)

[seeourbee]

Staying in the same public sector contract after April 2017

Ok so if you paid out half your turnover , you'd pay it on just that. Not 100% as the new proposals put in play ?

So in my view the new rules are quite different: old uses are saying I am an employee of my own company (which technically I never disagreed with!) but the new rules are saying I'm a deemed employee of the end client. That's a big change.

[teapot418]

Ok so if you paid out half your turnover , you'd pay it in just that. Not 100% as the new proposals put in play ?

Eh? Not sure what the question is.

Under IR35 (current rules) you take 95% of your post expenses turnover as PAYE. The best way to currently mitigate that is with large pension contributions. If you are found to be inside retrospectively, the calculation will be based on what you should have paid in tax/NI, less what you have paid in tax/NI and Corp tax.

Under the new rules, the 5% allowance is gone, so you take 100%. The treatment of pension contributions is still unconfirmed, but it looks likely that you will not get relief on NI.