Contradictory information from HMRC on calculating the "deemed payment"

[Unother]

The pages on off payroll working say deduct 5% for expenses, then PAYE the rest.
There is no mention of the rules changing.

How to calculate the deemed employment payment - GOV.UK

This example does not deduct 5%.

ESM10029 - Employment Status Manual - HMRC internal manual - GOV.UK

I'm confused. I bet clients even more so.

[cojak]

The pages on off payroll working say deduct 5% for expenses, then PAYE the rest.
There is no mention of the rules changing.

How to calculate the deemed employment payment - GOV.UK

This example does not deduct 5%.

ESM10029 - Employment Status Manual - HMRC internal manual - GOV.UK

I'm confused. I bet clients even more so.

The 5% will be out of date on the 6th April (I think).

[eek]

The pages on off payroll working say deduct 5% for expenses, then PAYE the rest.
There is no mention of the rules changing.

How to calculate the deemed employment payment - GOV.UK

This example does not deduct 5%.

ESM10029 - Employment Status Manual - HMRC internal manual - GOV.UK

I'm confused. I bet clients even more so.

I bet the clients aren't - as the rules are clear - if an end client determines that you are inside IR35 (i.e. public sector since 2018, private sector from April 2021) no expenses are allowed except for expenses that an employee could claim.

[malvolio]

It's already out of date. The changes in April are already in place in the public sector. It's not IR35, it's Section 10 of ITEPA 2018 (or perhaps 2017?) and while broadly similar to IR35 it is not the same legislation, and no 5% allowance since you don't have to operate a Ltd Co (in fact they would much rather you didn't).

[Unother]

I thought no 5%, but you never know, perhaps the had a last minute change of heart.

Oh. I forgot. Beneath Hector's cold emotionless exterior, beats a heart of stone.

I bet the clients aren't - as the rules are clear - if an end client determines that you are inside IR35 (i.e. public sector since 2018, private sector from April 2021) no expenses are allowed except for expenses that an employee could claim.

Depends on the client. In my experience, the smaller they are, the more confused they are about what IR35 even means. All sorts of half-baked pub truth has been overheard. Mostly, it seems to have scared them off hiring contractors at all.

[northernladuk]

I thought no 5%, but you never know, perhaps the had a last minute change of heart.

Oh. I forgot. Beneath Hector's cold emotionless exterior, beats a heart of stone.

[hector]Why does an employee need expenses?[/hector]

Depends on the client. In my experience, the smaller they are, the more confused they are about what IR35 even means. All sorts of half-baked pub truth has been overheard. Mostly, it seems to have scared them off hiring contractors at all.

If they are small enough they don't have to do it and it stays with the contractor.