Reply to: HSBC bans its consultancies from supplying limited company contractors

[JohntheBike]

Liabilities

Not sure this has been explored. We are told that if PAYE and NI isn't deducted at source and HMRC claim it should have been, then someone other than the contractor is liable. But how would the liability be decided if the liable party contested HMRC's position? i.e. who would be taken to the FTT? If it were to be the liable organisation, are the legal mechanisms there to prosecute them in the FTT? Would the contractor be involved at all with the FTT?

[WordIsBond]

If you're determined inside for the whole of the 22 months, at least you'd be able to push for 22 months of unpaid holiday and any sick pay from the most recent 10 months where days off ill went unpaid.

Yeah. You might have a chance to win that, but there's no guarantee you would.

But even if you did. Let's be clear. An extra £100 / day isn't that much. You have to take out 13.8% ERNI, 2% EENI, higher rate tax, and for most of these guys, loss of some or all of their personal allowance, if they are inside IR35. So your extra £100 / day may not be much more than £25 / day, by the time all is said and done.

And you are being compensated for the risk that 22 months at £500-700 / day might be dragged inside IR35.

I wouldn't stay on those terms. Might possibly switch to brolly, I think that's substantively less dangerous than getting an inside determination, but I'd do it now, not wait until April (I think HMRC, if they want to go after people switching to brolly, will look extra closely at those doing so within a month of the new tax year). But I'd sure want more than £100 / day to do it.

If clients want to be risk averse they aren't going to do it on my back. If their projects die, they die.

[LondonManc]

I'm not involved in the project, actually. The client approached me because they know I've already got several people working for me and have done projects before them, so they could use me as a consultancy for this purpose.

The project has run for 20 months so far. Most of the contractors have said under no circumstances will they stay without an outside determination because of the historical risk. By April, they're risking 22 months of outside work being dragged inside just because of the client's risk aversion.

If you thought you were at risk of IR35 taxes for 22 months, would you take a 6-9 month uplift of £100 / day as compensating you for that? I wouldn't.

If you're determined inside for the whole of the 22 months, at least you'd be able to push for 22 months of unpaid holiday and any sick pay from the most recent 10 months where days off ill went unpaid.

[pacontracting]

Absolutely not. It means taxes are applied to your rate and you are given the money net to you personally, usually by the agency.

No perm perks just as contracting.

Very important you start understanding the ways of getting paid pronto.

Surely 'perm' is the correct term, but 'perm' with the job agency rather than the end client.

The contract you sign is going to determine who your 'employer' is - either your Limited Company, your agency or an umbrella.

What was interesting (and this is showing my age now), agency temps, supplied by vendors such as 'Office Angels' etc, worked in exactly the same way - the temps were 'perm' with the agency, and may have been contracted for a couple of weeks on short term assignments. Wages were quoted as 'net' to the temp, with the agency charging the client an uplifted amount to account for the temps PAYE tax and profit for the agency. The temp would have to present the agency with their P45 at the start of the assignment and the agency would work out income based on tax already paid that financial year and so on.

As such, the first time you go 'perm' via an agency's PAYE scheme, you are going to have to provide a P45 to them from your PSC and will, to all intents and purposes, be an employee of the agency / umbrella company.

[ascender]

Unsurprisingly, RBS have taken a similar stance with their technology suppliers too.

[CanPayButWouldRatherNot]

Absolutely none. Was too lazy to start a new thread

in all fairness HSBC and DB share Resource Solutions as their front door so its probably not a bad shout (I did the HSBC to DB a few years ago .. frying pan fire springs to mind)

yep 45 weeks contracts and seem very keen to make us as close to permie DB staff as we can without actually being permie DB staff

[ladymuck]

Forgive my ignorance, but by PAYE do you mean perm?

I'm at DB and was under the impression that it would be a 6 month extension via a Resource Solutions approved umbrella.

Maybe different solutions for different areas? The PAYE scheme is being administered by Resource Solutions but there was no mention of it being an umbrella type arrangement AFAIA. Definitely 45 weeks in the team I heard about.

[northernladuk]

Forgive my ignorance, but by PAYE do you mean perm?

I'm at DB and was under the impression that it would be a 6 month extension via a Resource Solutions approved umbrella.

Absolutely not. It means taxes are applied to your rate and you are given the money net to you personally, usually by the agency.

No perm perks juat as contracting.

Very important you start understanding the ways of getting paid pronto.

[ensignia]

DB are giving those that go onto PAYE (not umbrella, it seems) 45 week contracts

If you don't like that offer, the door is the other option.

Forgive my ignorance, but by PAYE do you mean perm?

I'm at DB and was under the impression that it would be a 6 month extension via a Resource Solutions approved umbrella.

[NeedTheSunshine]

Absolutely none. Was too lazy to start a new thread

They are also offering proper perm positions to some (DB).

[ladymuck]

and this has what connection to HSBC?

Absolutely none. Was too lazy to start a new thread

[BR14]

and this has what connection to HSBC?

[ladymuck]

DB are giving those that go onto PAYE (not umbrella, it seems) 45 week contracts

If you don't like that offer, the door is the other option.

[WordIsBond]

How about everyone inside but all contractors get a £100/day expenses allowance to cover each day on site? The consultancy will still be making a decent margin on you (or up their rates to HSBC because they've made good contractors harder to find).

I'm not involved in the project, actually. The client approached me because they know I've already got several people working for me and have done projects before them, so they could use me as a consultancy for this purpose.

The project has run for 20 months so far. Most of the contractors have said under no circumstances will they stay without an outside determination because of the historical risk. By April, they're risking 22 months of outside work being dragged inside just because of the client's risk aversion.

If you thought you were at risk of IR35 taxes for 22 months, would you take a 6-9 month uplift of £100 / day as compensating you for that? I wouldn't.

[LondonManc]

FWIW, client sounded out some of their contractors and had few takers so that idea is dead. Unlike JB, I'd have been willing to do it, they'd have made it worth my while.

They're in a bind. They don't want the risk of declaring everyone outside but their project is going to die. They are trying to find ways to mitigate the hit to contractors, they say they are prepared to accept the cost of ERNI, but they'd have to uplift by 30% and even then, some of their guys are going to leave because of the risk on the historical contracts.

How about everyone inside but all contractors get a £100/day expenses allowance to cover each day on site? The consultancy will still be making a decent margin on you (or up their rates to HSBC because they've made good contractors harder to find).