CEST

[highlandspring]

Director income

Splitting the income would work well. I will push ahead with that approach in mind. Invoicing separately for Dir and non-Dir duties and putting the same amount through PAYE

Checking the whole thing with a specialist before I commit.

[jamesbrown]

Actually the Directorship role is quite straightforward wrt taxes due. Invoice the client at your agreed rate including expenses and so on. Put that money through YourCo's payroll as earned income with the usual taxes deducted. Any other company income from non-Director work you treat as normal, in or out of IR35 as you can best determine..

IR35 is then covered off, your taxes are correct and you have company income for other purposes - warchest, pensions, yacht, whatever.

It's how I used to do it and both the accountant and the client were happy with the arrangement.

I think that was established in post #3...

[malvolio]

Actually the Directorship role is quite straightforward wrt taxes due. Invoice the client at your agreed rate including expenses and so on. Put that money through YourCo's payroll as earned income with the usual taxes deducted. Any other company income from non-Director work you treat as normal, in or out of IR35 as you can best determine..

IR35 is then covered off, your taxes are correct and you have company income for other purposes - warchest, pensions, yacht, whatever.

It's how I used to do it and both the accountant and the client were happy with the arrangement.

[jamesbrown]

I don't see it that way - I am not back-filing for any perm roles, I am raising private equity for both companies which isn't a regular role its a specialist niche task.

The incumbent Finance teams have no experience in this area which is why I've been brought in for a specific period of time.

I have a consultancy agreement with the Agencies concerned, not their standard terms.

As you highlight concerns I'll have a specialist take a look to be sure though.

Thanks for the heads up etc

Yup, that's all you need to do. We can only guess at the status of your contract(s), whereas an expert will provide you with a proper evaluation. In future, I'd recommend you do this with every contract and also read up a little on IR35 (resources to your right ----->) so that you know what evidence of your WP to retain during your contract.

[highlandspring]

IR35

Sounds 100% IR35 caught to me


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I don't see it that way - I am not back-filing for any perm roles, and no role like this one is in their articles of association, I am raising private equity for both companies which isn't a regular role its a specialist niche task.

The incumbent Finance teams have no experience in this area which is why I've been brought in for a specific period of time.

I have a consultancy agreement with the Agencies concerned, not their standard terms.

As you highlight concerns I'll have a specialist take a look to be sure though.

Thanks for the heads up etc.

I agree its a different matter if I take on a Directorship role as I am discussing.

[GhostofTarbera]

Thanks for your input.

My current and previous roles are clearly consultancy as in each company there was or is someone holding the directorship other than me, but they dont have my skill set which is needed for a period.

In both roles I work for an agency who invoices my time, and I in turn invoice the agency, and in the event that I was off sick or moved on, would provide a replacement so there would be no loss on continuity. So I feel up and until now I am fine.

In one of my roles the director is moving on and I have been asked if I would take over and what my rate / package would be. Hence my post.

This is a small company but my role would then change to be a Director and consultant for a while, then ongoing just a director.

It may be possible to split the roles and be paid via PAYE for Director roles and continue consultancy as both aspects are separate.

Sounds 100% IR35 caught to me


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[jamesbrown]

So I feel up and until now I am fine.

You feel fine or you've always had a professional review of your contract and WP that supports that feeling? If not, then you really should. Interims are at a significant disadvantage w/r to IR35 to begin with, even if they aren't office holders of the client, because they are backfilling for a permie position. It's harder to demonstrate lack of D&C and not being part & parcel. But you could still be outside with a strong RoS and other supporting factors. However, if you haven't been routinely having your contracts and WP reviewed, and your OP does suggest you know very little about IR35, well then...

[highlandspring]

Interim

Thanks for your input.

My current and previous roles are clearly consultancy as in each company there was or is someone holding the directorship other than me, but they dont have my skill set which is needed for a period.

In both roles I work for an agency who invoices my time, and I in turn invoice the agency, and in the event that I was off sick or moved on, would provide a replacement so there would be no loss on continuity. So I feel up and until now I am fine.

In one of my roles the director is moving on and I have been asked if I would take over and what my rate / package would be. Hence my post.

This is a small company but my role would then change to be a Director and consultant for a while, then ongoing just a director.

It may be possible to split the roles and be paid via PAYE for Director roles and continue consultancy as both aspects are separate.

[malvolio]

Speaking from personal experience of this area...

An Office Holder is a person who is filling any role that is defined in the company's Articles of Association, so is not necessarily a board-level appointment but could be as lowly as the Chief Accountant for example.

If the post-holder is not an employee, then their income has to be treated a pure salary for tax purposes, even if (actually, certainly if, as per the old SLC case) they are a director of their own company. You either go on the client's payroll or you ensure YourCo pays its fees to you net of all taxes (including the rules over expenses).

And since those are the rules, it's not actually a question of IR35 or not, although the net effect is the same. However, you can't escape D&C, for instance, so an IR35 defence is pretty flimsy.

If you're that senior and don't know that, ,then you're possibly in the wrong job. Or you've misunderstood the nature of your engagement.

[highlandspring]

Office holder

An office holder is always within IR35, regardless of public/private sector or size of company. You need to account from income for an office holder position as PAYE.

Are you sure you're an office holder? The term has a particular meaning - you would typically be a company director or secretary.

Whether IR35 applies is not changing - the change is purely who makes the determination and deducts the tax.
Read up on IR35 and make sure you understand the questions you're answering.

To clarify this further - I currently only work for small companies via two employment agencies so I don't directly provide my services and I am not on companies house as a director of any of those. Until now I doubt I have been an office holder.

My question is more that I have more opportunities in the pipeline who wish to contract with me directly and I am aware that the rules change in April 2020

[Lance]

CEST

With a grasp of detail like you appear to have, I’m surprised anyone would use you in such important positions.

It’s likely that you aren’t actually an office holder though as MS says.
If you are then you really need to evaluate the financial risks you are carrying. And as you now know it’s not as you thought, you need to start being inside immediately . Not doing so is fraud.

[mudskipper]

I've checked the CEST site and my status appears to be within IR35 for medium or large companies, this is on the basis that I provide office holder duties.

However I only work for small companies as defined by Companies Act, the CEST site has a link for working with small companies but it only contains guidance about how to pay and calc tax and not what the rules are.

How do I check my status for small companies and what basis can I use to remain as a contractor?

An office holder is always within IR35, regardless of public/private sector or size of company. You need to account from income for an office holder position as PAYE.

Are you sure you're an office holder? The term has a particular meaning - you would typically be a company director or secretary.

Whether IR35 applies is not changing - the change is purely who makes the determination and deducts the tax.
Read up on IR35 and make sure you understand the questions you're answering.

[GhostofTarbera]

You are within IR35 for all previous roles, big small makes to difference, small companies just don’t have to do the end check for you

More guff here

HMRC’s ‘Small Company’ exemption from IR35 reform ‘could cause big problems’

What makes you think IR35 does not apply to you ?


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[highlandspring]

I've checked the CEST site and my status appears to be within IR35 for medium or large companies, this is on the basis that I provide office holder duties.

However I only work for small companies as defined by Companies Act, the CEST site has a link for working with small companies but it only contains guidance about how to pay and calc tax and not what the rules are.

How do I check my status for small companies and what basis can I use to remain as a contractor?