Originally posted by mmmBeer
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Reply to: Working with AWR/IR35
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Previously on "Working with AWR/IR35"
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Originally posted by mmmBeer View PostThanks for all repsonses on this thread, Im taking the contract
Now I have a decision to make on whether to go Agency PAYE or stick with my Lts Co and work inside IR35.....the calculators Ive used seem to think basic PAYE is a very slightly better take home and I wouldnt have the admin worries either. Is this the general consesus out there?
But then again I'm a control freak..
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Originally posted by Wanderer View PostActually, it's a good thing. If there is an engagement where the client wants IR35 style direction and control then they are going to have to abide by the AWR and pay holidays, benefits etc which is a bonus to the worker who would otherwise be languishing in an IR35 caught contract.
If the company wants to avoid the AWR and all it's complications then they have to stop and think about structuring the engagement as a proper B2B relationship which will ultimately help the contractor to avoid IR35.
I don't see the downside, everyone's a winner!
When AWR was introduced, a previous client came up with a new contract (non-negotiable) which they reckoned would avoid AWR.
By making everyone supply their services through a Ltd Co. as opposed to self employed or brollie, and by procuring direct not through agents, they reckoned they had a silver bullet.
Unfortunately the contract was a cut-n-paste from their standard employee contract and as such it put you slap-bang in IR35 territory.
So while I agree with Wanderer that everyone should be a winner, some clients/HR just can't help but but make pig's ear from a sliken purse.
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Thanks for all repsonses on this thread, Im taking the contract
Now I have a decision to make on whether to go Agency PAYE or stick with my Lts Co and work inside IR35.....the calculators Ive used seem to think basic PAYE is a very slightly better take home and I wouldnt have the admin worries either. Is this the general consesus out there?
Leave a comment:
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Originally posted by Wanderer View PostActually, it's a good thing. If there is an engagement where the client wants IR35 style direction and control then they are going to have to abide by the AWR and pay holidays, benefits etc which is a bonus to the worker who would otherwise be languishing in an IR35 caught contract.
If the company wants to avoid the AWR and all it's complications then they have to stop and think about structuring the engagement as a proper B2B relationship which will ultimately help the contractor to avoid IR35.
I don't see the downside, everyone's a winner!
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Originally posted by LisaContractorUmbrella View PostAWR does seem to have muddied the IR35 waters even more - doesn't get any easier does it
If the company wants to avoid the AWR and all it's complications then they have to stop and think about structuring the engagement as a proper B2B relationship which will ultimately help the contractor to avoid IR35.
I don't see the downside, everyone's a winner!
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Originally posted by mmmBeer View PostYep although there is no direct link supposedly, its impossible to get AWR benefits such as paid holiday and claim to be outside IR35, well you could try and chances are would get away with it but if caught then expect a big fine so depends on your appetite for risk.
I think ST summed it up really, I am going to be on the hook for 40% tax but 33 days holiday will negate half of that and other benefits may close the gap further. Its not going to be the most lucrative of contracts but other considerations such as work/life balance, security and skills/experience gained need to taken into account.
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Originally posted by LisaContractorUmbrella View PostThink you're right SwampThing - AWR does seem to have muddied the IR35 waters even more - doesn't get any easier does it
I think ST summed it up really, I am going to be on the hook for 40% tax but 33 days holiday will negate half of that and other benefits may close the gap further. Its not going to be the most lucrative of contracts but other considerations such as work/life balance, security and skills/experience gained need to taken into account.
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Think you're right SwampThing - AWR does seem to have muddied the IR35 waters even more - doesn't get any easier does it
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Originally posted by LisaContractorUmbrella View PostThere is definitely a connection but it's the other way round - if the worker is in business on their own account i.e. outside IR35 then they are outside scope of the AWR. Saying that, however, if the contractor is to be treated as a permie in the workplace and is to receive all the benefits of permiedom then he can't realistically consider working outside IR35
The worry is that clients can't be bothered with b) and c). They simply don't want to be the first AWR test case in the courts. That leaves a) which effectively puts contractor inside IR35 for that assignment. Depending on the day rate, the contractor then has to decide whether a deemed payment is worth the trouble, or walk away.
It may seem odd that some clients are moving in this direction, but I've found that clients make some arbitrary decisions about whether assignment terms are in/outside AWR. A common decision point is the day rate threshold. One client I worked for arbitrarily decided that anything below £300 a day automatically fell inside AWR (and by implication therefore, IR35). I saw that contractors with (arguably) specialised skills that would normally benefit from option c) above, found themselves increasingly drawn into a). Horrible thinking I'm afraid, but there it is. It wasn't helped by the client's late planning to implement AWR back in Sept 2011, and so they jumped on what they saw as the quickest solution for AWR compliance. They also weren't well advised by their recruitment MSP.
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Originally posted by Wanderer View PostIf the engagement is within the scope of the Agency Workers Regulations (as this one is) then the worker would certainly be caught by IR35 too. It's nonsense to say that the two are not connected.
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Originally posted by mmmBeer View PostI have been offered a contract that is AWR compliant and therefore inside IR35 as it will offer staff benefits such as paid holidays and bonus etc. There is no rewording option its sign or walk away.Originally posted by malvolio View PostAWR has nothing to do with IR35.
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Originally posted by mmmBeer View PostIve just googled fixed term contract and I sure as hell hope its not one of those!
I dont think it can be as there will be an agent.....from what I can gather HR at this client have said all contracts must be AWR compliant, therefore by default putting the contracts inside IR35 with the 'staff' benefits you get even if you dont want! Its a case of weighing up how much rate plus benefits is worth compared to the extra 20% tax.
If you fail the hypothetical comparator test then you have got a terrible rate.
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Originally posted by mmmBeer View PostIve just googled fixed term contract and I sure as hell hope its not one of those!
I dont think it can be as there will be an agent.....from what I can gather HR at this client have said all contracts must be AWR compliant, therefore by default putting the contracts inside IR35 with the 'staff' benefits you get even if you dont want! Its a case of weighing up how much rate plus benefits is worth compared to the extra 20% tax.
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I spent 2 yrs 10 mnths working like this as an employee of Manpower on assignment to a certain very large Company. Got paid contractor's rates but on PAYE, with 33 days p.a. paid leave, sick leave. I would say that I would do it again, since it also had paid overtime. Net take home was 65% after NI and PAYE.
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