Working through the regulations

[NetContractor]

This is interesting...

I know what the tax calculators say about tax liability as a contractor and I think they get it wrong. I know (roughly) what I have in my back pocket at the end of the year when all my expenses, taxes, vat, etc are taken into account.

And assuming that the tax liability becomes much easier to define INSIDE IR35 considering that you are then taxed at source, it would imply the calculator can get this fact correct.

So plugging into the contractor calculator what I (think) my net take home pay is now, it is suggesting I need to be on a rate of OVER £650 per day inside IR35. There may be different factors I am missing but that is a massive burden, suggesting that no matter what I do, staying is not an option.

[FrontEnder]

I'm not so sure I buy that. I appreciate there is no guarantee one way or the other, and HMRC can do whatever the hell they like, however one thing I have insisted is the current contract is terminated on Friday one way or the other. So if I am here next week it will be under a new contract entirely. Going back, I can prove lack of control, and other factors.

I don't think a new contract will be much protection from HMRC's greasy mitts. They'll probably just look at it as sham.

It's a risk, how big a risk that is no one can really say, so the only thing you can do is try to mitigate that risk. If you've got IR35 insurance, that will help. I'd probably be on the phone to them to see how this affects your cover.

[Scotchpie]

Does anyone know what the actual cost of the legislation is in comparison to being outside? Given that I can't claim travel expenses due to being on site for over 2 years; Currently on a day rate of £400. What does it need to be to mitigate being inside IR35?

I charge £400 a day and it recommends a £102 increase to be equivalent to outside but it depends on various factors which you can change.

[NetContractor]

I charge £400 a day and it recommends a £102 increase to be equivalent to outside but it depends on various factors which you can change.

Thanks. I've gone with 125, and I will see how it pans out when I get paid from the agency next month.

[northernladuk]

Thanks. I've gone with 125, and I will see how it pans out when I get paid from the agency next month.

When you say next month, that would be before the 6th of April?

You've read up and are happy/comfortable with the risk of retro inspection moving from outside to inside?

[NetContractor]

When you say next month, that would be before the 6th of April?

You've read up and are happy/comfortable with the risk of retro inspection moving from outside to inside?

No. Next month as in May.

All Invoices up to 31 March are getting paid on Monday 3rd April.

No, I am not happy about the possibility of a retrospective investigation. However, it is a risk that I am going to have to take if I want to give the client any chance of actually completing this project. I am obviously not a saint; I am increasing my rate to a level that I think should mitigate IR35. And signing a new INSIDE IR35 contract May (or may not) make any difference but at least by creating a new contract and changing the terms accordingly (ie. no sub clause, give them control, etc.) I feel more at ease that if there were to be a retrospective investigation I could dispute it. Time will tell.

It is either this or have a failed project in my wake.

[northernladuk]

On the failed project... I hate leaving gigs with a passion but someone is trying to nick 25% of my income and put 2 years worth of tax at risk I wouldn't lose a minute of sleep. You won't care a couple of months in to your next great gig on top dollah.

If you are that bothered you could go above and beyond the call of duty to help the find and train the next guy.

[NetContractor]

If you are that bothered you could go above and beyond the call of duty to help the find and train the next guy.

Not in 2 days I can't. And as bothered as I am...if I were to do it after leaving, it would not be for free, or inside ir35. It is such a messy situation.

[LondonManc]

On the failed project... I hate leaving gigs with a passion but someone is trying to nick 25% of my income and put 2 years worth of tax at risk I wouldn't lose a minute of sleep. You won't care a couple of months in to your next great gig on top dollah.

If you are that bothered you could go above and beyond the call of duty to help the find and train the next guy.

It's a tough call; while it's not the PSB directly responsible for this, their refusal to declare netcontractor outside has caused the situation.

[NetContractor]

Thought I'd leave one final comment...

...All Sorted. Staying put under a new (inside IR35) contract until the end of the project. I'm pleased with the result. HMRC should be too.

The chance of a retrospective investigation is always there, however given the number of cases the HMRC is going to have to look at, I think this is and has always been a low risk option. Time will tell.