How will this work in practice?

[breaktwister]

So according the the IPSE document if the client makes an inside determination then "the contractor business will be taxed at source via PAYE and RTI".

How exactly are they going to tax a business as if it was an employee from a practical perspective? Can you put a business name into the PAYE system?

[northernladuk]

Wouldn't you just go brolly or on PAYE with the agent. No need for the limited if you are inside?

[malvolio]

Whoever pays the bill to the contractor's company will deduct the NICs and PAYE amounts and send them on to HMRC. If you're direct that's the client. If you are through an agency it will be them. If you're with a consultancy and you fail the test - as many will - then it's the consultancy.

There are many stupidities to this whole idea, so treating a Limited Company as an individual is well within the boundary.

[SueEllen]

Whoever pays the bill to the contractor's company will deduct the NICs and PAYE amounts and send them on to HMRC. If you're direct that's the client. If you are through an agency it will be them. If you're with a consultancy and you fail the test - as many will - then it's the consultancy.

There are many stupidities to this whole idea, so treating a Limited Company as an individual is well within the boundary.

To be fair in the US companies can be considered the equivalent to a person, so that's probably where HMRC got their stupidity from.

[breaktwister]

Do you not need a National Insurance number to pay NIC? How can a business pay NIC and Personal Income tax via PAYE as it it were an individual? The whole thing is bonkers. Also, contract law in the UK has been build up over hundreds of years and these rules fly in the face of a lot of it. This should be an easy win in court for a good lawyer. HMRC simply don't have the powers to regulate how businesses interact with each other in this way.

[malvolio]

Do you not need a National Insurance number to pay NIC? How can a business pay NIC and Personal Income tax via PAYE as it it were an individual? The whole thing is bonkers. Also, contract law in the UK has been build up over hundreds of years and these rules fly in the face of a lot of it. This should be an easy win in court for a good lawyer. HMRC simply don't have the powers to regulate how businesses interact with each other in this way.

You're preaching to the converted. Most of that has been said several times, including to HMRC and No10. Wishing it goes away isn't going to work...

[eek]

None of this is new.

The new rules are simply a variation of the construction industry scheme introduced in august 1999 and modified in April 2015

And that means hmrc can treat you as if you were an employee and can ask third parties to withhold the tax parts of you payment and pay them to hmrc on your behalf.

And there is no way to challenge this, the cis rules were challenged for years and hmrc win. There is no way to attack what is simply an extension to them.

[breaktwister]

Thanks for the infos guys. This is the death of personal service companies then.

The fallout is going to be huge, great timing as well in the middle of Brexit. This will cost the gov more than they take in in new taxes.

[malvolio]

Thanks for the infos guys. This is the death of personal service companies then.

The fallout is going to be huge, great timing as well in the middle of Brexit. This will cost the gov more than they take in in new taxes.

Gosh. Hadn't thought of that...

[northernladuk]

Thanks for the infos guys. This is the death of personal service companies then.

The fallout is going to be huge, great timing as well in the middle of Brexit. This will cost the gov more than they take in in new taxes.

Christ man. Take tin foil hat off and give up with the woe is me line.

I'd go permie if I were you. Sounds like it's a bit too tough for you out here.