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Previously on "is my accountant correct about sub contracting work not being claimable?"

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  • Craig@Clarity
    replied
    Originally posted by NotAllThere View Post
    If, as a permie employee, I pay someone to write a small program which I'll use at work, that wouldn't be deductable - it's be paying someone out of your wages. I assume that's the approach the OP's accountant has taken - and it could be right, without knowing the details of the situation.
    The difference here is that the OP is assumed to be a contractor and the case would be trying to prove they were deemed an employee. Placing a subbie would mean their status was NOT of an employee and hence outside of IR35. Therefore, being outside of IR35 means the cost of the subbie is an allowable business expense through their PSC. The contract they had with their client would be a contract for services.

    If a permie employee was to pay for third party costs, and it was agreed with the employer that it would be reimbursable, then the cost would also be allowable in a simple case. It would be claimed via an expenses process and ultimately end up as the employer's cost in their company. Whichever way you look at this scenario though, the permie is still a permie because the employment contract is a contract of services.

    Leave a comment:


  • d000hg
    replied
    Originally posted by NotAllThere View Post
    If, as a permie employee, I pay someone to write a small program which I'll use at work, that wouldn't be deductable - it's be paying someone out of your wages. I assume that's the approach the OP's accountant has taken - and it could be right, without knowing the details of the situation.
    Interesting counterpoint to the "it's obvious" argument above. Strikes me as a bit tenuous but who knows?

    To the OP... does the client know/accept you're doing this or have you done so secretly and claimed the work as your own?

    Leave a comment:


  • JamJarST
    replied
    Originally posted by NotAllThere View Post
    If, as a permie employee, I pay someone to write a small program which I'll use at work, that wouldn't be deductable - it's be paying someone out of your wages. I assume that's the approach the OP's accountant has taken - and it could be right, without knowing the details of the situation.
    If you did that as a permie you would probably get into trouble with your employer unless you had permission. If you had permission then your employer would pay the cost and it wouldn't come out of your wages. Basically what I am saying is that permanent employees are not allowed to get someone else to do their work for them.

    Leave a comment:


  • NotAllThere
    replied
    If, as a permie employee, I pay someone to write a small program which I'll use at work, that wouldn't be deductable - it's be paying someone out of your wages. I assume that's the approach the OP's accountant has taken - and it could be right, without knowing the details of the situation.

    Leave a comment:


  • Craig@Clarity
    replied
    Just to help the OP, what everyone is saying here (which I agree with) is that if you bring in a sub contractor, you've clearly demonstrated that there is no requirement for YOUR personal service and therefore, you cannot be deemed to be an employee i.e. you are outside of IR35.

    It's been discussed regularly on CUK, that it's not necessarily the written contract that can be relied upon to determine your IR35 status. Instead, you would have to review your actual working relationship with the end client.

    Good news here, is that you would clearly be outside of IR35 if you ended up bringing in a subbie. In addition, the sub contractors cost is definitely an allowable expense in the company. It should be classed as a direct cost.

    Hope this helps

    Leave a comment:


  • tractor
    replied
    ...

    Originally posted by Waldorf View Post
    If you are contracting out some of the work you clearly are not caught by IR35 - you ahve had your contract reviewed haven't you?
    To be fair it might be the most tulip of contracts. It may not even mention sub-contract or substitution. IMO that is the starting point and if the contract is that bad, why not get some proper advice e.g. one of the professional reviewers - you can see who they are from the links here or on the PCG site or even Google it.

    I would get the contract properly reviewed and if there is scope, get it re-negotiated so that it's outside IR35 then the OP can do exactly what they wish regarding this element of the work. Otherwise, if they don't want to do that or there is not scope AND it's such a small element, why even worry about it?

    Leave a comment:


  • Waldorf
    replied
    If you are contracting out some of the work you clearly are not caught by IR35 - you ahve had your contract reviewed haven't you?

    Leave a comment:


  • Wanderer
    replied
    Originally posted by TestMangler View Post
    If you can sub any of it out, it's not an 'IR35 contract' as you put it
    What he said. If you are allowed to sub contract work then you have a silver bullet to the IR35 status - it's outside.

    Tell your accountant that you made a mistake on the IR35 status and that you are outside. Sorted.

    Leave a comment:


  • blinko
    replied
    I fail to see how this is not a legitmate business expense?? it should be fully claimable, you are basically acting as a recruitment agency

    Leave a comment:


  • TestMangler
    replied
    Originally posted by someguy1 View Post
    I wish it wasn't, but I'm 99% convinved thats its covered by IR35, they just fairly liberal with a small portion being outsourced

    Leave a comment:


  • someguy1
    replied
    Originally posted by TestMangler View Post
    If you can sub any of it out, it's not an 'IR35 contract' as you put it
    I wish it wasn't, but I'm 99% convinved thats its covered by IR35, they just fairly liberal with a small portion being outsourced

    Leave a comment:


  • TestMangler
    replied
    Originally posted by someguy1 View Post
    I have an ir35 contract which id like to sub contract some smaller pieces of work out when it gets busy.

    I asked my accountant if this was a claimable expense and they said if I was to pay someone to do some of my work, then it would be a non qualifying expense and would come out of the 5% allowance. They also said that this could end up meaning that I was in a loss position.

    Is this correct?
    If you can sub any of it out, it's not an 'IR35 contract' as you put it

    Leave a comment:


  • is my accountant correct about sub contracting work not being claimable?

    I have an ir35 contract which id like to sub contract some smaller pieces of work out when it gets busy.

    I asked my accountant if this was a claimable expense and they said if I was to pay someone to do some of my work, then it would be a non qualifying expense and would come out of the 5% allowance. They also said that this could end up meaning that I was in a loss position.

    Is this correct?

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