Reply to: New contract inside IR35 via brolly

[mwounder]

And what is your opinion on the fact you were inside all along and might have to pay it all back by staying?

It's an incredibly difficult decision and SO many people are doing the same thing i.e. flipping to brolly. The chances are incredibly slim & I have spoke to people 'in the field' if you like about it including lawyers. I have insurances in place and it's a new contract etc. The market for my line of work is dead at the moment. What am I supposed to do...the anxiety is great either way if I don't have work and I can't afford to be without an income.

From HMRC...and as you say it's dependent on trusting them but I need to work:

HMRC will not open a new compliance enquiry into a contractor’s return for tax years before 6 April 2021 in circumstances where:

a client decides that a contract is within the off-payroll working rules (IR35)
a contractor changes the way they work from providing and invoicing services through an intermediary entity to now being paid via a client or end user’s payroll
a contractor ends a contract because they disagree with a client decision on status
This includes any decisions that clients may have already made to prepare for the April 2020 changes, which have now been delayed.

Pretty stressed about it all to be honest.

[philgo]

And what is your opinion on the fact you were inside all along and might have to pay it all back by staying?

yep good question....Client offered me initially to be OUT and then IN from April.
I counter-offered and ask for a better rate but fully in from day 1 to avoid risks in regards of HMRC.

Regarding keeping or not my LTD I don't know...I'm working in banking and right now most of the offers are IN. Very few OUT roles there...

[northernladuk]

I'm in a similar position but going from outside to inside with a new contract so going via Umbrella. I'm keeping my Ltd company...it's a pain paying up £75pm for little but gives you that option still. Speaking to experts in the field, they expect things to calm down in 12-18 months but let's see. There's still a lot of outside contracts in the public sector.

Good luck

And what is your opinion on the fact you were inside all along and might have to pay it all back by staying?

[mwounder]

Looks like I'm gonna start a new inside gig for 6 months at the end
Next question to think about is "what do I do with my LTD". keep it or MVL it...

I'm in a similar position but going from outside to inside with a new contract so going via Umbrella. I'm keeping my Ltd company...it's a pain paying up £75pm for little but gives you that option still. Speaking to experts in the field, they expect things to calm down in 12-18 months but let's see. There's still a lot of outside contracts in the public sector.

Good luck

[philgo]

Looks like I'll be done at end of March so I'll be snapping the first gig that comes up inside or outside so me for a start

Looks like I'm gonna start a new inside gig for 6 months at the end
Next question to think about is "what do I do with my LTD". keep it or MVL it...

[northernladuk]

Which market is that?

Looks like I'll be done at end of March so I'll be snapping the first gig that comes up inside or outside so me for a start

[SueEllen]

You will have a queue of people round the block that will take your inside role in this market - unless you have niche skills


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Which market is that?

[GhostofTarbera]

yes I think we all understand the legal point.... and this is exactly what's happening in my situation....
However the way it is currently done could still be legal I'm afraid even if it looks very dodgy.... That way is also how most of new inside IR 35 contracts in private sector are proposed to contractors right now so the overall best practice is not good. Add to that the economy aspect, the few roles available on the market and the number of candidates looking for job.
And lastly even if it's legal, at the end someone has to pay for the extra Employer NI. End clients don't want to increase their contractor cost. Agents don't want to explain to end client they need to uplift their rates cause they do not want risk to lose the client. So even if it's legal, we as contractor have to factor Employer's NI is our agreed rate.

At the end of the day and talking to lot of contractors around me it's a bit like take the job knowing you will have a big cut or wait for another one that might never come...

You will have a queue of people round the block that will take your inside role in this market - unless you have niche skills


Sent from my iPhone using Contractor UK Forum

[philgo]

On a very specific point of pedantry - No-one's allowed to deduct employer's NI from your earnings - that is an employer cost and must, by law be paid by the employer. In practice, as we see here, clients/agents just expect us all to take a rate cut to pay their employer NI , because they don't want to pay any extra taxes.

yes I think we all understand the legal point.... and this is exactly what's happening in my situation....
However the way it is currently done could still be legal I'm afraid even if it looks very dodgy.... That way is also how most of new inside IR 35 contracts in private sector are proposed to contractors right now so the overall best practice is not good. Add to that the economy aspect, the few roles available on the market and the number of candidates looking for job.
And lastly even if it's legal, at the end someone has to pay for the extra Employer NI. End clients don't want to increase their contractor cost. Agents don't want to explain to end client they need to uplift their rates cause they do not want risk to lose the client. So even if it's legal, we as contractor have to factor Employer's NI is our agreed rate.

At the end of the day and talking to lot of contractors around me it's a bit like take the job knowing you will have a big cut or wait for another one that might never come...

[Peoplesoft bloke]

That’s not all - I suspect that a nice juicy commission is about to wing his way.

First of all, make sure that you are choosing a legitimate umbrella
https://www.contractoruk.com/forums/...-umbrella.html
because £320 out of £400 doesn’t sound right to me - that’s 80% and well into dodgy territory to me. I would expect that figure to be around £220 - £240 (55% - 60%).

And yes, you are expected to pay for Employer’s NI - welcome to the new world of contracting.

On a very specific point of pedantry - No-one's allowed to deduct employer's NI from your earnings - that is an employer cost and must, by law be paid by the employer. In practice, as we see here, clients/agents just expect us all to take a rate cut to pay their employer NI , because they don't want to pay any extra taxes.

[philgo]

they will claim (perhaps rightly) commercial confidentiality. the one that matters is the agency to you, possibly via the brolly for the sake of the legalities. And that won't state the corrected rate but the original £400 one or they risk blowing their little earner...

At its simplest, the bottom line is that the offer is £400 a day and you will get no more than £250 of it in your personal account (or less depending on any possible pension provisions). If that's not acceptable, don't take the gig.

Yep ....I understand the whole thing and debate around this Employer NI now.....tricky rules....
How come do you go from £400 gross to £250a day net in my pocket?

[malvolio]

This is exactly where the grey area is actually...

On one side I have a contract from the brolly with a DRAFTED assignment schedule (no rate on it, no notice period etc..very drafted) attached and I need to sign off the whole thing.
On another side the agency has surely a contract and an assignment schedule with the end client. On this doc surely there is an assignment rate agreed with the end client.
So question is can you get assignment schedule direct from the agency? Answer is probably NO as you would see what end rate they charge to the client. Unless agency can produce one for you which actually show you the info but with a lower rate but I doubt it....I have asked the question to the agency...let's see....

they will claim (perhaps rightly) commercial confidentiality. the one that matters is the agency to you, possibly via the brolly for the sake of the legalities. And that won't state the corrected rate but the original £400 one or they risk blowing their little earner...

At its simplest, the bottom line is that the offer is £400 a day and you will get no more than £250 of it in your personal account (or less depending on any possible pension provisions). If that's not acceptable, don't take the gig.

[philgo]

Assignment schedule isn't a contract. Maybe just bad wording on their part but yes they can tell you what you are assigned to do but not a contract. I must admit I don't know if they will send it direct or it will come to you via the brolly. The latter follows the proper contract route but the former seems to make more sense.

This is exactly where the grey area is actually...

On one side I have a contract from the brolly with a DRAFTED assignment schedule (no rate on it, no notice period etc..very drafted) attached and I need to sign off the whole thing.
On another side the agency has surely a contract and an assignment schedule with the end client. On this doc surely there is an assignment rate agreed with the end client.
So question is can you get assignment schedule direct from the agency? Answer is probably NO as you would see what end rate they charge to the client. Unless agency can produce one for you which actually show you the info but with a lower rate but I doubt it....I have asked the question to the agency...let's see....

[northernladuk]

Who gives me the assignment schedule? Are you saying it's not my business because it's between the client and the agent? Therefore I won't get one?

Assignment schedule isn't a contract. Maybe just bad wording on their part but yes they can tell you what you are assigned to do but not a contract. I must admit I don't know if they will send it direct or it will come to you via the brolly. The latter follows the proper contract route but the former seems to make more sense.

[philgo]

guess again. They're just pulling your pants down because you are naive.

My comment about preparing for 2 years is actually ironic ^^ I'm actually totally aware they could try to increase their margin on my rate by telling me they don't know about IR35 changes and Employer's NI because it's new etc......
Now all am trying to understand is how can I know it? Hence I was asking if I should not be provided with an assignment schedule showing rate, notice, start date etc from the agency? Any other idea?