Reply to: Breaking: Pimlico Plumbers loses Supreme Court appeal....

[NigelJK]

use a ltd company and therefore require an accountant

Accountant is not required, it's prudent but not a requirement. You can file your own accounts.

[Mordac]

So the costs of the accountant that is still required because of the ltd, would be paid by the ltd and still be tax deductible. The costs wouldn’t come out of post tax agency income.

Fair point, it's all in the perception; c£1500 against £20k seems far worse than c£1500 against £100k.

[sbakoola]

Many years ago in Chelsea my gas combi boiler broke down and I got in different plumbers to give me quotes for a new one, they all came and gave me a quote but Pimlico Plumbers were the only ones demanding payment for just giving a quote and their estimation for installation and the parts was around 40% higher than all the other quotes from other companies. I paid them to get rid of them for good but they were a cheek, money for nothing basically.

[Pondlife]

IR35 allows for private sector contractors caught in IR35 a 5% break to meet limited company expenses.
Contractors' Questions: What is the IR35 5% expense rule?

However public sector IR35 contracts won't have this allowance...

If IR35 becomes a blanket requirement for private sector like it is for the public sector, we are likely to lose the 5% allowance as well...

Agreed, so why would you continue to use a ltd company and therefore require an accountant?

Am I missing something here?

Your post, all income is paye via agent/brolly so no need for a ltd therefore no accountant?

Mordac’s post, 80% paye + 20% not IR35. In which case the ltd for the 20% can still deduct accountancy costs pre-tax?

It’s the loss of training, travel & subsistence that will bring the hurt, not accounting costs.

[Bheleu]

What does the ruling mean to the IR35 debate

Does anybody how this ruling is actually going to apply IR35 arguments ?

[Scotslaw]

So the costs of the accountant that is still required because of the ltd, would be paid by the ltd and still be tax deductible. The costs wouldn’t come out of post tax agency income.

IR35 allows for private sector contractors caught in IR35 a 5% break to meet limited company expenses.
Contractors' Questions: What is the IR35 5% expense rule?

However public sector IR35 contracts won't have this allowance...

If IR35 becomes a blanket requirement for private sector like it is for the public sector, we are likely to lose the 5% allowance as well...

[Pondlife]

One assumes that not all client engagements were "caught" (perhaps only those through agency channels) and that one would still need to operate a ltd. So perhaps 80% of income would be PAYE and 20% ltd, but the costs of running a ltd wouldn't change.

So the costs of the accountant that is still required because of the ltd, would be paid by the ltd and still be tax deductible. The costs wouldn’t come out of post tax agency income.

[Scotslaw]

I think you're correct.

I just don't know how they kept straight faces in the meeting when they dreamt this up the first time around. Can you imagine it... "let's make them like employees and pay full PAYE on the company income", "but what about the employer's NI", "ah good point, but seeing as they're running a LTD company, they'll be employers, so we'll charge them that as well" Which to me is an admission I'm in business with all the associated risks and challenges.

Oh well ho hum.

It's the same thing with the 2019 Loan Charge too...
"Let's call the loan 'employment income' and tax it accordingly"
"But it was provided through a trust"
"Good point... let's also class it as a 'loan from a trust' and charge IHT whenever the loan is written off"
"SORTED!"

[Mordac]

Sasguru postulates that workers from foreignland are brought in because local workers are useless. This implies that working in foreignland requires a higher level of ability than working in the UK. Conversely, the bringing of people from foreignland implies that foreigners find the work in the UK more facile than in their home country. As a corollary, if some can't cut it in the UK, then they'll be unable to cut it in foreignland either, so your point is refuted.

Your inability to construct simple logical arguments unfortunately gives a data point in favour of sasguru's hypothesis.

Personally, I think it's garbage, but I do think you lack the ability to think critically. But don't feel bad, you've many bedfellows in this regard.

What a load of bollox...

(Is that simple and logical enough for you?)

[gables]

I don't think HMRC particularly care about employment law, the rights of employees, or indeed about anything except charging and collecting tax.
I believe that their only motivation to class workers as within IR35 is to get more tax. I don't think they particularly care if in the process, the worker continues to not be entitled to employment benefits or rights... as long as they are now paying more tax.

I think you're correct.

I just don't know how they kept straight faces in the meeting when they dreamt this up the first time around. Can you imagine it... "let's make them like employees and pay full PAYE on the company income", "but what about the employer's NI", "ah good point, but seeing as they're running a LTD company, they'll be employers, so we'll charge them that as well" Which to me is an admission I'm in business with all the associated risks and challenges.

Oh well ho hum.

[Mordac]

Yes it must be quite annoying to have your bubble of ignorance prodded. Much easier to hide away.

If your bubble of ignorance was ever prodded, the fallout would be horrific...

[Scotslaw]

If *HMRC\client deem you a disguised employee (by ruling IR35 applies) then you should be entitled to the benefits of employment

I don't think HMRC particularly care about employment law, the rights of employees, or indeed about anything except charging and collecting tax.
I believe that their only motivation to class workers as within IR35 is to get more tax. I don't think they particularly care if in the process, the worker continues to not be entitled to employment benefits or rights... as long as they are now paying more tax.

[Mordac]

Why would you pay for the accountancy costs of running a ltd if you were PAYE?

One assumes that not all client engagements were "caught" (perhaps only those through agency channels) and that one would still need to operate a ltd. So perhaps 80% of income would be PAYE and 20% ltd, but the costs of running a ltd wouldn't change.

[Mordac]

You do this every time, whenever anyone challenges your worldview you create a strawman ad hominem attack against whomever and ignore the premise. It's getting quite boring, people must avoid you at social events.

Do you think he ever gets invited to any social events?

[sasguru]

The ignore list and a little self discipline work wonders.

Yes it must be quite annoying to have your bubble of ignorance prodded. Much easier to hide away.