Determination rules and MVL timeline

[TygerTyger]

Thanks NorthernLad and Paralytic for your replies.

To clarify/consider further. I was wondering if the risk of being on the 'radar' is reduced further by using a different agency for the PAYE piece.

So ... currently I'm outside IR35 with Agency A for the client and I've been offered PAYE via the same Agency A. However there are contractors working here via agency B. I'm wondering if I arranged to go PAYE via Agency B instead for the client that would mitigate a bit of the risk?

As for the future play, going inside IR35 would work for my personal situation I think. I'm fortunate to live in London area and a tube commute to most places so I'd look to go that route if rates are not insanely low. Expenses would be a tube and lunches so no different to perm life. However, I'd be looking at utilising the max pension allowance of 40k to further reduce my tax liability hit and also grow the pension pot. I'm closer to retirement than not but ... I'm not quite there yet ;-)

Good to hear your views on the switch agency route as mentioned above.

[northernladuk]

Which agency you use etc doesn't matter. As I've already said, the determination is on the role. HMRC will get the information regardless of agency or who is doing the job. The role will be reported as inside and agency will report back to HMRC regardless which one.

[Paralytic]

Which agency you use etc doesn't matter. As I've already said, the determination is on the role. HMRC will get the information regardless of agency or who is doing the job. The role will be reported as inside and agency will report back to HMRC regardless which one.

And as I've already said, TygerTyger has said they are going PAYE, not inside IR35, so there is no role determination so there is no information for HMRC to get.

The increased risk would be if HMRC asked companies for the names of people who had moved from PSC to umbrella.

[Maslins]

How so Maslins - keen to understand as I thought the risk was a real one.

I just think it relies on quite a few steps:
1) I don't think HMRC will know who your Ltd Co's clients are, they'll just know overall turnover figures.
2) I don't think HMRC will know who the end client is when you work for an umbrella. The umbrella is your employer, so in terms of PAYE submissions it will be the umbrella's name that HMRC know.
3) Moving from Ltd Co worker to umbrella worker will surely have some kind of different contract.
4) Even if HMRC know all the info, they'll also be aware that just because you've made this change does not mean your work was definitely inside IR35 before. It will cost them considerable time and resources to challenge.
5) They've already kind of "won" in that you're now paying all your taxes via PAYE.
6) You're looking to close your Ltd Co.

So for me it just seems unlikely HMRC will know what you've done, and decide that it's a good use of their resources to challenge historic stuff with a company that's trying to close as you're paying all the taxes of an employee going forwards, and they may well lose anyway if they did. I may be wrong and they might go all out for this, but personally I think it's doubtful. I anticipate they'll be looking at the bigger picture.

[CanPayButWouldRatherNot]

I just think it relies on quite a few steps:
1) I don't think HMRC will know who your Ltd Co's clients are, they'll just know overall turnover figures.
2) I don't think HMRC will know who the end client is when you work for an umbrella. The umbrella is your employer, so in terms of PAYE submissions it will be the umbrella's name that HMRC know.
3) Moving from Ltd Co worker to umbrella worker will surely have some kind of different contract.
4) Even if HMRC know all the info, they'll also be aware that just because you've made this change does not mean your work was definitely inside IR35 before. It will cost them considerable time and resources to challenge.
5) They've already kind of "won" in that you're now paying all your taxes via PAYE.
6) You're looking to close your Ltd Co.

So for me it just seems unlikely HMRC will know what you've done, and decide that it's a good use of their resources to challenge historic stuff with a company that's trying to close as you're paying all the taxes of an employee going forwards, and they may well lose anyway if they did. I may be wrong and they might go all out for this, but personally I think it's doubtful. I anticipate they'll be looking at the bigger picture.

thanks for this post ... .sincerely hope this is the case as I think there are many like us in this boat