Staying in the same public sector contract after April 2017

[teapot418]

I've never done the calculations in detail but bottom line does the old rules leave you with bigger tax bill than an employee. If it does that can't possibly make sense as it therefore actually punishes you for being a Psc rather than out you on equal footing as e'ee

I think you're confusing 'you' and 'yourCo'. You will be on the same footing as the employee, yourCo will pay the NI.

[seeourbee]

I'm not. If the old rules are saying that the turnover figure (nevermind the 5% for now) is to be treated as salary it literally leaves no cash to pay any ERS NI. That's my point.

[teapot418]

I'm not. If the old rules are saying that the turnover figure (nevermind the 5% for now) is to be treated as salary it literally leaves no cash to pay any ERS NI. That's my point.

YourCo 'earns' the money and pays you.

Yes, if yourCo turnover is 100K, you (personally) will be worse off than an employee with a salary of 100K.

[seeourbee]

Thanks that clarifies it I think. I always knew it sought to put things equal I never dreamt it intended to make you worse off than an employee (to the tune of 13%!). That's criminal, can't understand how that became law.

[SueEllen]

Thanks that clarifies it I think. I always knew it sought to put things equal I never dreamt it intended to make you worse off than an employee (to the tune of 13%!). That's criminal, can't understand how that became law.

Because people have put their heads in the sand and have put a stupid petition on the government's petition website perhaps?

[Andy Hallett]

Thanks that clarifies it I think. I always knew it sought to put things equal I never dreamt it intended to make you worse off than an employee (to the tune of 13%!). That's criminal, can't understand how that became law.

Not technically a criminal offence but some of you might want to dig up AWR from its shallow grave.....

Agency Workers Regulations - NHS Employers

[bobspud]

Not technically a criminal offence but some of you might want to dig up AWR from its shallow grave.....

Agency Workers Regulations - NHS Employers

You should also go and look for the documents around contingency labour one contracts as well they very much cover what happens when the departments take responsibility for sd&c

[MPwannadecentincome]

Thanks that clarifies it I think. I always knew it sought to put things equal I never dreamt it intended to make you worse off than an employee (to the tune of 13%!). That's criminal, can't understand how that became law.

Simple.

Client to pay £100K salary costs the client £100K + EmploYER NI
Client to pay contractor £100K invoice costs the client £100K + Agency markup + VAT (which most can reclaim back) = a ton of cost to the Client.

An apples to apples comparison would be if the contractor was getting the same as the employee salary £100K + EmploYER NI then the net to both under IR35 would be the same and the cost to the client if it was a direct contract would be the same.

Law has nowt to do with it.

[malvolio]

Simple.

Client to pay £100K salary costs the client £100K + EmploYER NI
Client to pay contractor £100K invoice costs the client £100K + Agency markup + VAT (which most can reclaim back) = a ton of cost to the Client.

An apples to apples comparison would be if the contractor was getting the same as the employee salary £100K + EmploYER NI then the net to both under IR35 would be the same and the cost to the client if it was a direct contract would be the same.

Law has nowt to do with it.

Your economics are slightly awry. It costs an employer somewhere over £175k to employ someone on a £100k salary when all the overheads, notice period and utilisation inefficiency is added in. A £100k salary gig would be charged at rather more than £100k for an annual contract, but less than that £175k.

[PS oh noes]

Supposing I stayed in a simliar role but PS client wanted to convert to FTC for 6 months to complete the project we were all working on. How red a flag would this be to HMRC? Assuming working practices were the same, it's currently outside based on lack of SDC (though I'd be nervous about having to fight it) but agency is taking a blanket "we don't care, we're calling you all inside" attitude.