Reply to: So I think its finally dawned on IPSE's management

[Fred Bloggs]

I don't want to be a employee which is why I'm now well away from the public sector.

Good on you. I went the other way. I don't want to pay the tax. There are no contracts for me. So I became an employee again. But not in the UK.

[eek]

Come on, you aren't seriously suggesting you want to be an employee of the brolly/agency AND still pretend to be a business? You can't even claim flat rate VAT or expenses any more. How many people are going to do this? Seriously?

I don't want to be a employee which is why I'm now well away from the public sector.

[SimonMac]

At best VAT is utterly irrelevant to any IR35 argument. At worst it leaves the rest of the consultation response being treated as ill-informed gibberish...

Looking at the contempt with which IPSE's arguments were listened to I suspect the latter is what happened.

Given that HMRC also ignored everyone else as part of the consultation, maybe its not IPSE that in ineffective, but HMRC are stubborn?

[seeourbee]

Bloody iPhone !!

[Fred Bloggs]

FTFY.

The treasury building that houses the HMRC sty is at 100 Parliament St.

Maybe the tea and biccies are not so good there eh?

[DaveB]

They need to speak to 100 Parliament St not No.10

FTFY.

The treasury building that houses the HMRC sty is at 100 Parliament St.

[seeourbee]

They need to speak to 1 Parliament St not No.10

[Fred Bloggs]

They certainly don't need their expensive offices right in the heart of Westminster. No need for that at all. All it says to me is that they like to 'live the life'.

Hang on a minute, now you're questioning the strategy to be at the very heart of politics and enjoy the hospitality of number 10. To be a respectable lobbyist rather than a pain in the bum. You just can't do that. The strategy has clearly failed/is failing, but never mind.

[seeourbee]

They certainly don't need their expensive offices right in the heart of Westminster. No need for that at all. All it says to me is that they like to 'live the life'.

[Fred Bloggs]

True but remember

1. VAT is different.
2. Your company is still invoicing the agency £2000 a week say. The fact that the agency is only paying you £1000 a week after tax is deducted / withheld is irrelevant to the Customs and Excise side of HMRC.

I think the issue is that people assume that HMRC is a single entity when it really isn't. It's 2 separate entities (1) Customs and Excise and (2) HMRC and you need to treat them as that.

Come on, you aren't seriously suggesting you want to be an employee of the brolly/agency AND still pretend to be a business? You can't even claim flat rate VAT or expenses any more. How many people are going to do this? Seriously?

[cojak]

I think the issue is that people assume that HMRC is a single entity when it really isn't. It's 2 separate entities (1) Customs and Excise (VAT) and (2) Inland Revenue (Tax) and you need to treat them as that.

FTFY.

[DaveB]

True but remember

1. VAT is different.
2. Your company is still invoicing the agency £2000 a week say. The fact that the agency is only paying you £1000 a week after tax is deducted / withheld is irrelevant to the Customs and Excise side of HMRC.

I think the issue is that people assume that HMRC is a single entity when it really isn't. It's 2 separate entities (1) Customs and Excise and (2) HMRC and you need to treat them as that.

If you are still operating through a Ltd. what will need to happen is that the VAT component of the invoice needs to be treated separately so that your co. can then pay it to HMRC. Otherwise you are going to end up seriously out of pocket.

Brolly users won't be affected by this as you are an employee of the brolly and VAT is dealt with by them.

[eek]

Surely, once you are all on the agency or umbrella payroll, there will be no VAT to pay to the employee? When I was an employee of VeryBigCo PLC, they never paid me any VAT with my salary?

True but remember

1. VAT is different.
2. Your company is still invoicing the agency £2000 a week say. The fact that the agency is only paying you £1000 a week after tax is deducted / withheld is irrelevant to the Customs and Excise side of HMRC.

I think the issue is that people assume that HMRC is a single entity when it really isn't. It's 2 separate entities (1) Customs and Excise and (2) HMRC and you need to treat them as that.

[Fred Bloggs]

Surely, once you are all on the agency or umbrella payroll, there will be no VAT to pay to the employee? When I was an employee of VeryBigCo PLC, they never paid me any VAT with my salary?

[eek]

I know employment taxes in the UK are insidious and extremely high, but since when did an employer pay VAT on an employee's salary?

Now that is a valid argument - its not however the one IPSE has down there. The mitigating comment from HMRC would be that VAT is not actually our money but something we collect on behalf of HMRC...

Also the logic goes - Local authority pays £100 VAT to Agency, Agency pays £80 VAT to contractor - we pay £80 to HMRC, Agency pays £20 to HMRC the local authority claims the £100 back from HMRC see https://www.gov.uk/government/public...ess-activities

Hence in this world its a accounting issue more than actual revenue....