PSC obligations

[JohntheBike]

Yes

thanks. Let's see how the private sector reacts!

[eek]

So would you say, as NLUK indicates, that in the public sector most who worked in the March prior to the April implementation were paid before April 6th and thus had no tax or NI deducted at source?

Yes

[JohntheBike]

Yep, we're running payrolls up to 5/4 with reporting on outstanding timesheets every day from 20/3. We have a timetable to get provisional status, contracts flipped & payments processed. We will be issuing contracts by end of Feb on the post April basis with a start date aligned to last payment. This particular issue has received a great deal of consideration from agencies, failure to get this right leaves the agency liable for ERNI on payments after 6/4 that haven't been converted properly, not a risk an agency will take.

So would you say, as NLUK indicates, that in the public sector most who worked in the March prior to the April implementation were paid before April 6th and thus had no tax or NI deducted at source?

[JohntheBike]

Says the guy who speculates on outcomes of potetial FTT etc constantly.

With the PS many of the agencies moved the payment date forward so it fell in the right year. Risky but not aware of anyone that got paid late.

ok, that's all I was asking.

[Maslins]

Seen a lot of comments on here about closing the Limited company, or dormancy, and going via umbrella or perm but surely it's not that simple? Like us as individuals, companies have obligations of their own; insurances, equipment leases, professional fees, overdrafts, outstanding tax, etc. It's not like you can just put the brakes on unless the company has a huge warchest. Are people planning on pumping their new net wages into their Limited company to honour these obligations? Could work out quite expensive. What about those that don't have much retained? Are they planning on insolvency? Would these IR35 changes be some justification for just letting the company rot, i.e. they (HMRC) killed the market? Would they come after the owner/director for unpaid tax?

You're right there will be a bunch of things to unwind/de-register/cancel etc when looking to close your company.

You mention "equipment leases"...certainly it's one thing we'd mention when people are considering things like a company car. You're normally committing for at least two years, sometimes 3+, so do ensure you're happy you'll be wanting to keep your company for that long before signing up to anything along those lines.

Certainly your company should have enough within it to settle any final tax bills etc. If it doesn't, and you're relying on future income to pay past tax bills, that's a very unhealthy way to operate.

There may be some people who decide to simply leave their company to rot as you put it. This may be especially true (with some modest sympathy) where the company's contractor focussed accountant decides to give up the ghost as the bottom has just fallen out of the market. You would be failing in your responsibilities as director, and there are powers available to punish you for that. Whether HMRC/anyone else bothers to is another matter.

[ComplianceLady]

Says the guy who speculates on outcomes of potetial FTT etc constantly.

With the PS many of the agencies moved the payment date forward so it fell in the right year. Risky but not aware of anyone that got paid late.

Yep, we're running payrolls up to 5/4 with reporting on outstanding timesheets every day from 20/3. We have a timetable to get provisional status, contracts flipped & payments processed. We will be issuing contracts by end of Feb on the post April basis with a start date aligned to last payment. This particular issue has received a great deal of consideration from agencies, failure to get this right leaves the agency liable for ERNI on payments after 6/4 that haven't been converted properly, not a risk an agency will take.

[northernladuk]

Says the guy who speculates on outcomes of potetial FTT etc constantly.

With the PS many of the agencies moved the payment date forward so it fell in the right year. Risky but not aware of anyone that got paid late.

[JohntheBike]

When you close the company, you pay all dues upto and including the date of the last invoice.

Therefore there are no unpaid taxes at the time of closure.

(The same applies if you don’t close, you just pay the Corp tax in the accounting period and the VAT on all invoices from the Company coffers, then tell your accountant to shut-down the VAT bit to end sending in zero returns.)

I'm still not sure that we've had enough actual examples of the implications of work done in March and invoiced in March but paid in April. Yes, we are aware that we should not work and invoice in March because tax and NI will be deducted at source in April. However, there are bound to be some circumstances where some are obliged to do this. So payments in April will be made to the contractor's LTD, Co. and not to the individual. How have those in the public sector fared with this issue? Tax and NI can only be deducted when an individual's NI number is provided and for anyone working in March through their company, there will be no obligation to provide that information. Let's have some actual examples, not speculation or opinion.

[cojak]

To both, I'm more interested in people's own 'views' on the questions asked than researching what the answers are. I genuinely believe there will be many contractors resigned to jumping on the payroll/umbrella without realising the implications.

Take unpaid tax to mean tax not yet paid/due, as in VAT and Corporation Tax due further down the line. Same concern as the above.

When you close the company, you pay all dues upto and including the date of the last invoice.

Therefore there are no unpaid taxes at the time of closure.

(The same applies if you don’t close, you just pay the Corp tax in the accounting period and the VAT on all invoices from the Company coffers, then tell your accountant to shut-down the VAT bit to end sending in zero returns.)

[oliverson]

I was going to reply as I have time on my hands today, but I really CBA.

You just did!

[wattaj]

I was going to reply as I have time on my hands today, but I really CBA.

[oliverson]

Also, this shouldn’t be a horrible surprise* to people, anyone leasing equipment/cars should have checked things out before signing those contracts. As it is they are going to need to cancel them or service them out of existing salaries.

Oh, and I’m not sure what you mean by ‘unpaid tax’...

(Edit: *yes, it is horrible, but no it shouldn’t be a surprise...)

To both, I'm more interested in people's own 'views' on the questions asked than researching what the answers are. I genuinely believe there will be many contractors resigned to jumping on the payroll/umbrella without realising the implications.

Take unpaid tax to mean tax not yet paid/due, as in VAT and Corporation Tax due further down the line. Same concern as the above.

[cojak]

One should need to read up a bit more about each of the points that you raise before posting.

Also, this shouldn’t be a horrible surprise* to people, anyone leasing equipment/cars should have checked things out before signing those contracts. As it is they are going to need to cancel them or service them out of existing salaries.

Oh, and I’m not sure what you mean by ‘unpaid tax’...

(Edit: *yes, it is horrible, but no it shouldn’t be a surprise...)

[wattaj]

Seen a lot of comments on here about closing the Limited company, or dormancy, and going via umbrella or perm but surely it's not that simple? Like us as individuals, companies have obligations of their own; insurances, equipment leases, professional fees, overdrafts, outstanding tax, etc. It's not like you can just put the brakes on unless the company has a huge warchest. Are people planning on pumping their new net wages into their Limited company to honour these obligations? Could work out quite expensive. What about those that don't have much retained? Are they planning on insolvency? Would these IR35 changes be some justification for just letting the company rot, i.e. they (HMRC) killed the market? Would they come after the owner/director for unpaid tax?

One should need to read up a bit more about each of the points that you raise before posting.

[oliverson]

Seen a lot of comments on here about closing the Limited company, or dormancy, and going via umbrella or perm but surely it's not that simple? Like us as individuals, companies have obligations of their own; insurances, equipment leases, professional fees, overdrafts, outstanding tax, etc. It's not like you can just put the brakes on unless the company has a huge warchest. Are people planning on pumping their new net wages into their Limited company to honour these obligations? Could work out quite expensive. What about those that don't have much retained? Are they planning on insolvency? Would these IR35 changes be some justification for just letting the company rot, i.e. they (HMRC) killed the market? Would they come after the owner/director for unpaid tax?