Reply to: United Nations IPSA Contract

[jamesbrown]

Don't get it - they both mention a value being applied if OVER a specific figure - but the figure is the same bar £1.

So if my profits are less that £11,908 a year - I pay nothing?

If my profits are £30k - do I pay £3.15 a week, or 9.73% of £19,092 ( £0 - 11908 ) or both?

As far as I can see, it's just clumsy phrasing with a > £11,908 and >= £11,909, both of those being practically the same. As I said, they are moving both to the income tax threshold in the next tax year. But as LM says, it's both.

[ladymuck]

Don't get it - they both mention a value being applied if OVER a specific figure - but the figure is the same bar £1.

So if my profits are less that £11,908 a year - I pay nothing?

If my profits are £30k - do I pay £3.15 a week, or 9.73% of £19,092 ( £0 - 11908 ) or both?

Both. The first sentence says "two classes of NI are paid". The class 4 kicks in at £1 higher than class 2.

Agreed, it makes very little sense.

I'm sure there's historical documentation somewhere explaining why someone thought it was a good idea.

[Bluebird]

No, the wording is correct as of 2022/23, if a bit clumsy. It's moving to both being aligned with the income tax threshold in 2023/24.

Don't get it - they both mention a value being applied if OVER a specific figure - but the figure is the same bar £1.

So if my profits are less that £11,908 a year - I pay nothing?

If my profits are £30k - do I pay £3.15 a week, or 9.73% of £19,092 ( £0 - 11908 ) or both?

[jamesbrown]

No, the wording is correct as of 2022/23, if a bit clumsy. It's moving to both being aligned with the income tax threshold in 2023/24.

[Bluebird]

Do i assume that on that link that HMRC have got a word wrong:

You usually pay 2 types of National Insurance if you’re self-employed:

• Class 2 if your profits are more than £11,908 a year
• Class 4 if your profits are £11,909 or more a year

Should class 2 be LESS than 11908?

[Bluebird]

So you'll be self-employed in HMRC terms, so this is where you need to look:
https://www.gov.uk/self-employed-nat...nsurance-rates

You'll pay it via self-assessment

Thanks - thats exactly the info I was looking for!

[ladymuck]

Ok, so speaking to someone who is already on one of these.

Their opinion is that you get paid a wodge of cash in dollars based on a monthly rate, you then take care of tax your end.

This to me seems strange - I can see how I can account for income tax as part of self assessment perhaps, but that doesn't take account of NI.

So you'll be self-employed in HMRC terms, so this is where you need to look:
https://www.gov.uk/self-employed-nat...nsurance-rates

You'll pay it via self-assessment

[Bluebird]

Ok, so speaking to someone who is already on one of these.

Their opinion is that you get paid a wodge of cash in dollars based on a monthly rate, you then take care of tax your end.

This to me seems strange - I can see how I can account for income tax as part of self assessment perhaps, but that doesn't take account of NI.

[jamesbrown]

I thought I highlighted the important bit so we didn't have to go down the VAT rabbit hole?

You may have thought so (and for that reason) . However, we cannot see the contract and self-employed people must register for VAT when they first know that they will exceed the threshold.

[northernladuk]

Regarding VAT, assuming the invoicing entity is VAT registered, then the VAT place of supply rules apply. The general rule for B2B supplies (there are special rules, this is the general rule) is that the place of supply is where the customer is based, so if the customer is based in the US, these B2B services would be "outside of the scope of UK VAT" (not to be confused with exempt from VAT) and any invoice should include this phrase. In terms of accounting for realised/unrealised gains/losses on FX in your accounts (based on invoice date and FX date), this is easily handled by modern bookkeeping software, such as FA. But, as noted above, this doesn't sound like a B2B contract, more like a fixed term employment.

I thought I highlighted the important bit so we didn't have to go down the VAT rabbit hole?

[Bluebird]

Thanks all - thats most enlightening!

[jamesbrown]

Tax is also simple - Income from the UN is tax free for reasons but I suspect you will need a form from HMRC that they won't be able to find easily...

Worth looking into, but it would depend on their contract as that exemption is for employed officials rather than self-employed contractors (and certainly not B2B supplies):

https://www.gov.uk/hmrc-internal-man...ual/intm860760

[jamesbrown]

Regarding VAT, assuming the invoicing entity is VAT registered, then the VAT place of supply rules apply. The general rule for B2B supplies (there are special rules, this is the general rule) is that the place of supply is where the customer is based, so if the customer is based in the US, these B2B services would be "outside of the scope of UK VAT" (not to be confused with exempt from VAT) and any invoice should include this phrase. In terms of accounting for realised/unrealised gains/losses on FX in your accounts (based on invoice date and FX date), this is easily handled by modern bookkeeping software, such as FA. But, as noted above, this doesn't sound like a B2B contract, more like a fixed term employment.

[eek]

Tax is also simple - Income from the UN is tax free for reasons but I suspect you will need a form from HMRC that they won't be able to find easily...

[northernladuk]

Yes I did and yes I do.

It sounds like it could be treated as a permie / fixed term contract type role - but you have to provide your own insurance, payment is made in $ based on a rate and it looks like you get paid monthly but with some holiday allowance ( which again looks like permie ).


However I wasn't sure about things like what happens with exchange rates, and tax ect which was why I asked if anyone had prior knowledge of working using this type of arrangement.

Have you got any experience that you can share?

Just for clarity of others. IPSA is International Personnel Services Agreement

Individuals engaged under IPSA have the status of International Personnel Service Agreement Holders, and are specifically engaged in recognition of their skills and expertise, to provide identified deliverables. These individuals are not UNDP staff members, but are considered affiliate personnel and, as such are not governed by or subject to the United Nations’ Staff Regulations and Rules. Nor is this contract modality governed by national legislation in countries where UNDP operates. Given that the services covered by the IPSA may only be provided by natural and not legal persons (e.g., duly formed/registered companies), and by non-incorporated partnerships, the IPSA falls within the overall scope of UNDP Human Resource management framework.

https://uncareer.net/new-ipsa-and-np...nd-un-agencies