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Previously on "AccountingWeb : HMRC and ASA join forces to fight tax avoidance"

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  • eek
    replied
    Originally posted by DealorNoDeal View Post
    I've been out of contracting for a few years, so I'm not up to speed on the new (public sector) IR35 rules. Is it the end user who is ultimately liable for any unpaid PAYE? Or could the agency be on the hook?

    If a contractor somehow managed to still use a scheme, I wonder who HMRC would go after?

    Contractor <- scheme <- agency <- end user
    If inside IR35 it would be up to the fee payer (agency) to show they performed suitable due diligence - FCSA claim that using their members is enough - whether a court would accept that is an interesting test case (and I suspect it won't be if more diligent checks were available elsewhere that went beyond FCSA's annual "random" anonymous audit check.

    But the reality is that the contractor is responsible for the tax they are supposed to pay so were the contractor to knowingly enter a scheme using an "umbrella" that wasn't part of the agencies recommendations I believe the blame and costs would be passable back to the contractor.

    Which means you have in interesting cross over point where say the agency insists on a FCSA / Professional passport umbrella and the umbrella is dubious..

    * Worth pointing out my interest here - as I'm working on a scheme that provides umbrellas with continual compliance checks so that agencies and end clients are 100% sure that everything is fully compliant and HMRC won't come knocking.
    Last edited by eek; 16 December 2020, 16:46.

    Leave a comment:


  • DealorNoDeal
    replied
    I've been out of contracting for a few years, so I'm not up to speed on the new (public sector) IR35 rules. Is it the end user who is ultimately liable for any unpaid PAYE? Or could the agency be on the hook?

    If a contractor somehow managed to still use a scheme, I wonder who HMRC would go after?

    Contractor <- scheme <- agency <- end user

    Leave a comment:


  • eek
    replied
    Originally posted by DealorNoDeal View Post
    Yep, probably more than anything else, that will kill off the schemes.

    Agencies and end users simply won't touch anyone who isn't working through a fully PAYE compliant entity.

    The old trick of inserting a dummy UK intermediary between the Isle of Man and the agencies won't work anymore.
    Checks what most agencies think is enough due diligence - Nope, most agencies think a listing on FCSA / Professional Passport is enough.

    Thankfully that is changing as I give them a reality check.

    Leave a comment:


  • DealorNoDeal
    replied
    Originally posted by Fred Bloggs View Post
    The key to many things in life - Education. But with perhaps 99 per cent of folks IR35 caught, I am hoping the market for scam scheme operators is going to be much more difficult to operate in. For the first time ever, end users and agencies are going to be accountable for ensuring IR35 is applied at tax paid. If not, they will be liable. Massively reduces the scope for naive or greedy individuals to be scammed by scheme operators.
    Yep, probably more than anything else, that will kill off the schemes.

    Agencies and end users simply won't touch anyone who isn't working through a fully PAYE compliant entity.

    The old trick of inserting a dummy UK intermediary between the Isle of Man and the agencies won't work anymore.

    Leave a comment:


  • Fred Bloggs
    replied
    The key to many things in life - Education. But with perhaps 99 per cent of folks IR35 caught, I am hoping the market for scam scheme operators is going to be much more difficult to operate in. For the first time ever, end users and agencies are going to be accountable for ensuring IR35 is applied at tax paid. If not, they will be liable. Massively reduces the scope for naive or greedy individuals to be scammed by scheme operators.

    Leave a comment:


  • lowpaidworker
    replied
    Originally posted by piebaps View Post
    From speaking to a former salesman, he didn't rely on ads or promotions. His customer base was linkedin. The content on there comes from contractors.
    yeah that was my original point. A partnership between HMRC and ASA is like putting a Ferrari engine in a reliant robin. waste of time

    Leave a comment:


  • piebaps
    replied
    From speaking to a former salesman, he didn't rely on ads or promotions. His customer base was linkedin. The content on there comes from contractors.

    Leave a comment:


  • lowpaidworker
    replied
    Originally posted by eek View Post
    You seem to have missed the point - regulation by itself actually doesn't solve anything - it looks great but it doesn't work

    You only have to look at other labour type rules such as gangmasters to see why they don't actually solve the problem - they set minimum standards which people then try to avoid via false paperwork and threats to withhold work.
    How would me as a contractor being told that as part of my contract outside IR35 that I am only allowed to use these x umbrellas all of which are regulated and have proved they deduct Tax and NIC..... actually I guess that just makes the me pay tax inside IR35.... hmm see the point.

    Leave a comment:


  • eek
    replied
    Originally posted by lowpaidworker View Post
    well agree to disagree but perhaps on responsibility. Not all contractor's have your knowledge of the industry and how it works. So reworded to say anyone outside IR35 and using an Umbrella needs to be told by their employer or agency they can only use a regulated Umbrella and those umbrellas must register with HMRC or a n other body and explain their practices. Will pretty much kill stone dead all the leeches.
    You seem to have missed the point - regulation by itself actually doesn't solve anything - it looks great but it doesn't work

    You only have to look at other labour type rules such as gangmasters to see why they don't actually solve the problem - they set minimum standards which people then try to avoid via false paperwork and threats to withhold work.

    Leave a comment:


  • lowpaidworker
    replied
    Originally posted by eek View Post
    There is no need to regulate the industry - if the contract is inside IR35 it's already the responsibility of the agency to ensure appropriate tax is paid.

    Which means the agency needs to be 100% sure that all the payments are done correctly and regulation by itself doesn't give agencies that information it just gives them a cop out and means of passing the buck.
    well agree to disagree but perhaps on responsibility. Not all contractor's have your knowledge of the industry and how it works. So reworded to say anyone outside IR35 and using an Umbrella needs to be told by their employer or agency they can only use a regulated Umbrella and those umbrellas must register with HMRC or a n other body and explain their practices. Will pretty much kill stone dead all the leeches.

    Leave a comment:


  • eek
    replied
    Originally posted by lowpaidworker View Post
    HMRC have stated they have been doing this for a while. Quicker they take the adds down the quicker they come up. HMRC cannot police the internet its not possible. Nor can ASA really. Christ they cant even hold Facebook or Twitter to account. Most of these promotors email directly as well. That partnership is doomed to failure and more lip service to select committees to show they are trying albeit not very hard.

    Interesting I listened to the Treasury select evidence on the LC on Monday and one gentleman made a great suggestion. Regulate the umbrella market and make sure all engagers are held responsible for making sure their contractors use one of the regulated Umbrella firms. When I did contracting the firm at the time recommended only half a dozen and said I had to use one of these. Didn't help 4 of them used EBT schemes but that was 12 years ago....
    There is no need to regulate the industry - if the contract is inside IR35 it's already the responsibility of the agency to ensure appropriate tax is paid.

    Which means the agency needs to be 100% sure that all the payments are done correctly and regulation by itself doesn't give agencies that information it just gives them a cop out and means of passing the buck.
    Last edited by eek; 16 December 2020, 12:24.

    Leave a comment:


  • lowpaidworker
    replied
    Originally posted by eazy View Post
    HMRC and ASA join forces to fight tax avoidance | AccountingWEB

    HMRC and the Advertising Standards Authority (ASA) launched a joint initiative designed to cut out dishonest marketing by promoters of tax avoidance schemes

    See above link for full Article
    HMRC have stated they have been doing this for a while. Quicker they take the adds down the quicker they come up. HMRC cannot police the internet its not possible. Nor can ASA really. Christ they cant even hold Facebook or Twitter to account. Most of these promotors email directly as well. That partnership is doomed to failure and more lip service to select committees to show they are trying albeit not very hard.

    Interesting I listened to the Treasury select evidence on the LC on Monday and one gentleman made a great suggestion. Regulate the umbrella market and make sure all engagers are held responsible for making sure their contractors use one of the regulated Umbrella firms. When I did contracting the firm at the time recommended only half a dozen and said I had to use one of these. Didn't help 4 of them used EBT schemes but that was 12 years ago....

    Leave a comment:


  • AccountingWeb : HMRC and ASA join forces to fight tax avoidance

    HMRC and ASA join forces to fight tax avoidance | AccountingWEB

    HMRC and the Advertising Standards Authority (ASA) launched a joint initiative designed to cut out dishonest marketing by promoters of tax avoidance schemes

    See above link for full Article

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