New Public Sector Rules and Business Expenses

[Lost It]

There is............................if the contract is deemed within IR35.

Feel you have missed out, now?

Ah. Outside IR35.

[youngguy]

I don't wanna be rude but even though we don't know the details just looking at the size and scope of the change as well as the number of people working hard to circumvent this that was never going to be the case really, even in a worst case scenarion.

On the contrary - this is very polite for you 😉

I personally thought Gov had it all stitched up this time and it did feel like things were tighter, given the tool and the assumptions most of us made around intermediaries being risk averse and blanketing inside.

For me, the tool not being mandatory and agents now starting to seem to look for outside options , some semblance of sensible MAY prevail. Looking on here many seemed to share similar views "ps contracting dead, mass exodus etc".

Hopefully Monday will provide clarity and if the impact is not huge then that will be a win for all, including yourself if you want to come back and say "I told you all it would be ok".....although I must confess to not recalling you every suggesting there would be little change before this post!

[northernladuk]

I am starting to wonder if it won't be quite the "all change, everyone is inside" that we thought it may be?

I don't wanna be rude but even though we don't know the details just looking at the size and scope of the change as well as the number of people working hard to circumvent this that was never going to be the case really, even in a worst case scenarion.

[youngguy]

What did people think of the article written by our CEO?

Will be interesting to see what detail is announced on the 5th.....

I thought it was honest and confirmed a lot of what we thought (tax dodgers, disguised employee, HMRC have no clue about a tool etc). To that end it was a useful confirmation.

Also,quite how this is going to work if the took is not mandatory I don't know? Aside from moving the responsibility - which of course may mean some agents etc default to inside for risk reasons - I am starting to wonder if it won't be quite the "all change, everyone is inside" that we thought it may be?

[northernladuk]

What did people think of the article written by our CEO?

I think you need to be working a bit harder to pay for his high profile piss ups meetings.

[Dan@OrangeGenie]

And people are surprised by the view expressed in When I met chancellor Hammond after Autumn Statement 2016 :: Contractor UK

What did people think of the article written by our CEO?

Will be interesting to see what detail is announced on the 5th.....

[eek]

And people are surprised by the view expressed in When I met chancellor Hammond after Autumn Statement 2016 :: Contractor UK

[northernladuk]

What? There's a 5% expense allowance for running a Ltd Co? Why don't I know this?

Guess it's too late now.

[MrMarkyMark]

What? There's a 5% expense allowance for running a Ltd Co? Why don't I know this?

Guess it's too late now.

There is............................if the contract is deemed within IR35.

Feel you have missed out, now?

[Lost It]

What?

What? There's a 5% expense allowance for running a Ltd Co? Why don't I know this?

Guess it's too late now.

[jamesbrown]

Under the new PS rules there will be no 5% expense allowance for running your company.

However, if caught by this, you are still running a Ltd company and you will still have legitimate business expenses (insurance, accountancy, filing fees, etc.). Presumably you will still be able to (and it would be advantageous to) pay for these through the LtdCo using retained profit from previous years?

(And in that case, in the first year at least, would this potentially result in a trading loss which you can then carry back to get a small corporation tax refund?)

Sure, it's just a withholding tax, not a more general change. You'll need to reconcile the differences between the invoiced amounts and the payments received as a withholding tax, and then receive full relief on any distributions to yourself (whether as salary or dividends), resolving any discrepancies at year end (in your SATR). That said, I'm not sure how you'd arrive at a trading loss if you're still actively trading (and if you're not actively trading, how you'll justify business expenses or why you aren't closing the company). Of course, the details will be forthcoming with regard to the precise operation of the withholding tax, but the changes have a defined scope.

[northernladuk]

Question is is it worth still running a LTD company? Bearing in mind the scale of the problem and all the unknowns this isn't really the most pressing question at the moment.

[b r]

Can't see why not, the PS rules apply to the contract, not to your Limited Co.

[eek]

Under the new PS rules there will be no 5% expense allowance for running your company.

However, if caught by this, you are still running a Ltd company and you will still have legitimate business expenses (insurance, accountancy, filing fees, etc.). Presumably you will still be able to (and it would be advantageous to) pay for these through the LtdCo using retained profit from previous years?

(And in that case, in the first year at least, would this potentially result in a trading loss which you can then carry back to get a small corporation tax refund?)

Until we get the details next Monday (December 5th) nobody knows..

[supersteamer]

Under the new PS rules there will be no 5% expense allowance for running your company.

However, if caught by this, you are still running a Ltd company and you will still have legitimate business expenses (insurance, accountancy, filing fees, etc.). Presumably you will still be able to (and it would be advantageous to) pay for these through the LtdCo using retained profit from previous years?

(And in that case, in the first year at least, would this potentially result in a trading loss which you can then carry back to get a small corporation tax refund?)