Reply to: Continue with working through Limited Company inside ir35

[Andy Hallett]

Can anyone let me know please where I can find this official legislation as I need it to show the agency

I'd suggest your agency are in for an exciting week if they were unaware of this legislation.

[LoughriggFell]

Can anyone let me know please where I can find this official legislation as I need it to show the agency

I haven't seen that reference, so don't know, but I think a likely place would be in the Finance Bill (No. 2) 2017, Schedule 1, Workers Services provided to Public sector through Intermediaries starting at page 128

[Viv]

I'm in this exact situation. Agency trying to take 13.8% off my agreed ltd company

My accountant has raised something which might be of interest.

In the new legislation it states that the fee payer cannot deduct secondary (employer) NI from a fee that has already been agreed with a limited company.

He believes this gives me a right to argue that they should pay employers NI and it should not come from my pay rate.

Can anyone let me know please where I can find this official legislation as I need it to show the agency

[gables]

And what they should really should do is increase the rate to the client, after all the client made the inside determination. If they want to determine people as staff there should be a consequence.

Who is 'they' in that? I think you are confusing two different entities using the same word.

My bad, should have typed

And what the agent should really should do is increase the rate to the client, after all the client made the inside determination. If the client want to determine people as staff there should be a consequence.

[northernladuk]

And what they should really should do is increase the rate to the client, after all the client made the inside determination. If they want to determine people as staff there should be a consequence.

Who is 'they' in that? I think you are confusing two different entities using the same word.

[gables]

They won't be able to deduct Ers NI, although they might look to reduce your rate to cover it.

Technically umbrellas don't actually 'deduct' Ers NI - from a legal perspective it is an additional fee levied on the gross pay. I've always found it slightly odd that they've been able to specifically reference Ers NI on payslips.

And what they should really should do is increase the rate to the client, after all the client made the inside determination. If they want to determine people as staff there should be a consequence.

[Qdos Contractor]

Could they really charge an additional fee to me after I've signed a contract? I have a feeling they will try to force me to sign a new contract.. which isn't at all fair (or legal?). And I am the customer after all.

So basically working through my Limited Company I should technically only have income tax and employees NI deducted.

But working as an agency employee or umbrella I will have employers NI, employees NI and income tax deducted?

Am I stupid or is this correct?

They won't be able to deduct Ers NI, although they might look to reduce your rate to cover it.

Technically umbrellas don't actually 'deduct' Ers NI - from a legal perspective it is an additional fee levied on the gross pay. I've always found it slightly odd that they've been able to specifically reference Ers NI on payslips.

[Qdos Contractor]

Surely you shouldn't be engaging through a Ltd at all and be PAYE or brolly? I thought post 9 form QDOS covered it.

You can still go through ltd but PAYE/NI would be deducted by the agency and you'd get paid net. You'd then have offsets to ensure you weren't paying tax twice.

In reality many agencies aren't going want to handle the payroll requirements, which will mix employment tax with VAT, so a push towards brollies is likely.

[northernladuk]

Interesting. Thanks.

[Sn3md]

Because I need to keep my company open for private work, accountants fees are equivalent to umbrella fees and I would like to retain as much of my pay rate as possible (I.e. Not pay employers NI from my pay rate if I can).

I also just feel this unnecessary push from the agency to join an umbrella and I'm confused as to their purpose now that expenses can no longer be claimed. I have to pay for my own indemnity insurance anyway and I don't want a pension as I'm an expat.

[northernladuk]

The just terminate your old on as per notice period and offer you another with amended terms. All fair and legal.

Why so eager to keep through your limited if you don't mind me asking? What are the advantages over a brolly or PAYE?

[Sn3md]

Could they really charge an additional fee to me after I've signed a contract? I have a feeling they will try to force me to sign a new contract.. which isn't at all fair (or legal?). And I am the customer after all.

So basically working through my Limited Company I should technically only have income tax and employees NI deducted.

But working as an agency employee or umbrella I will have employers NI, employees NI and income tax deducted?

Am I stupid or is this correct?

[RonBW]

My accountant has raised something which might be of interest.

In the new legislation it states that the fee payer cannot deduct secondary (employer) NI from a fee that has already been agreed with a limited company.

He believes this gives me a right to argue that they should pay employers NI and it should not come from my pay rate.

That's correct. It would be illegal for the agency to deduct employers NI and apprenticeship levy directly from your rate.

However, they could charge an additional fee to either you or the end client which just happens to match the contribution that they have to hand over. IANAL, but they would need to word that incredibly carefully in the contract IMHO.

[northernladuk]

Surely you shouldn't be engaging through a Ltd at all and be PAYE or brolly? I thought post 9 form QDOS covered it.

But HMRC have just smashed in to PS without a thought of the fallout and putting all the risk on agencies/clients. Not sure arguing this is going to make any difference?

[Sn3md]

My accountant has raised something which might be of interest.

In the new legislation it states that the fee payer cannot deduct secondary (employer) NI from a fee that has already been agreed with a limited company.

He believes this gives me a right to argue that they should pay employers NI and it should not come from my pay rate.