Reply to: Silence and then client co and agency are saying this. what do i do

[northernladuk]

So what would you do if it were you ? Goto the CEO's office with a stick ?

Thankfully I'm not in that position. Right at the beginning I did state I was going to stay at the client I was with if it went inside. A lot about the client suited me at the time and was one of the best gigs I'd done in 10 years. I changed my mind around August/Sept when it all started going crazy. Thankfully I hit the clients 2 year rule in Oct so the decision was out of my hands.

The really weird thing is exactly the same happened to me when the Public sector hit so avoided that decision as well.

I really feel for anyone in this potion but if I had to say what I would have done I'd have gotten out of my client before a determination due to my length of time and taken a new gig fully expecting to go inside but with only a month or two at risk.

I do still think anyone that's at a client with more than 6 months+ history to the point an inside determination has landed has made a mistake but appreciate its easy to say that now.

[WordIsBond]

So what would you do if it were you ? Goto the CEO's office with a stick ?

Go to the CEO's office to hand in your notice. If you stay under any of those terms you may be very vulnerable to historical investigation.

Time to get another gig, even if it has to be inside. An inside gig elsewhere doesn't carry the same risk of historical investigations. This one does. Tell them they've forced you to leave.

[platforminc]

Right, so you thought you were outside, the client has now blown that out of the water and you carry on. Top of HMRC's list of easy money.

So what would you do if it were you ? Goto the CEO's office with a stick ?

[Paralytic]

Probably but the only reason he'd be asking is to use his money most efficiently and that wouldn't be. But fair point if that's right.

No probably or if - there's no reason why the umbrella should limit how much you want to salary sacrifice, beyond their legal obligations (eg, paying minimum wage). If they do, that's their decision, not because they have to do that.

[GhostofTarbera]

Right, so you thought you were outside, the client has now blown that out of the water and you carry on. Top of HMRC's list of easy money.

Wow, indeed easy pickings for HMRC


Sent from my iPhone using Contractor UK Forum

[northernladuk]

Just to be clear, the clientco said in an email. Should my engagement extend beyond April 2020, then it will be in scope for IR35 and will be classified as "deemed employment" for tax purposes.
They were clear here and the above scares me.

Right, so you thought you were outside, the client has now blown that out of the water and you carry on. Top of HMRC's list of easy money.

[platforminc]

Just to be clear, the clientco said in an email. Should my engagement extend beyond April 2020, then it will be in scope for IR35 and will be classified as "deemed employment" for tax purposes.
They were clear here and the above scares me.

But this statement is potentially completely incorrect and the distinction is very important. By going those options does not necessarily mean you are inside. Some clients have just banned PSCs to avoid making a determination.

So.. Has you client...

A) Determined you are inside and given you options. The determination has potentially handed your ass to HMRC. Client has stated the gig you have been doing has been potentially inside all along.

B) Have refused to engage PSCs so no determination is made therefore HMRC has not comparison. They may see this is an admittance they are all inside but its an assumption so slightly less risky.

You've got to be absolutely sure which situation you are in.

[northernladuk]

For completeness, the umbrella shouldnt limit your pension contributions to £40K per year. So long as they can pay you minimum wage, you should be able to pay in as much as you want, including any carry forward from previous years. It’s the individuals responsibility to work out if/when theyve used their unused allowances and avoid paying more tax.

Probably but the only reason he'd be asking is to use his money most efficiently and that wouldn't be. But fair point if that's right.

[Paralytic]

But in answer to your question, the umbrella will have a scheme which you will join and you can dictate how much you want to put in up to your 40k limit.

When you leave you either let it run or move it to another SIPP.

For completeness, the umbrella shouldnt limit your pension contributions to £40K per year. So long as they can pay you minimum wage, you should be able to pay in as much as you want, including any carry forward from previous years. It’s the individuals responsibility to work out if/when theyve used their unused allowances and avoid paying more tax.

[northernladuk]

But in answer to your question, the umbrella will have a scheme which you will join and you can dictate how much you want to put in up to your 40k limit.

When you leave you either let it run or move it to another SIPP.

Give Lucy at Clarity Umbrella a ring. She will tell you thst her scheme runs like thst. Only a few brollies offer this so if you've ygot a list to pick from then it might not be an option.

[northernladuk]

so basically the clientco has put us all inside IR35 which is wrong, but i am not here to argue about what is right/wrong.

But this statement is potentially completely incorrect and the distinction is very important. By going those options does not necessarily mean you are inside. Some clients have just banned PSCs to avoid making a determination.

So.. Has you client...

A) Determined you are inside and given you options. The determination has potentially handed your ass to HMRC. Client has stated the gig you have been doing has been potentially inside all along.

B) Have refused to engage PSCs so no determination is made therefore HMRC has not comparison. They may see this is an admittance they are all inside but its an assumption so slightly less risky.

You've got to be absolutely sure which situation you are in.

[BR14]

No.

The first item where I mentioned Ltd Co was regarding #3.
The second item where I mentioned umbrella was regarding #2.
The third item where I mentioned agency was regarding #1.

BR14 gave the same final advice as me but bypassed the waffle.

i'm in systems engineering.
we leave the waffle to those more suited to it

i rest my case m'lud

[ladymuck]

Thanks for the reply, just to ensure that i am not using the wrong terms. The options from the agency are as follows

1. PAYE with the agency
2. Umbrella with PAYE engagement
3. PSC with deductions (i.e. all NIC’s and PAYE tax to be deducted prior to payment to the PSC/Ltd company)

The alst option you described below, is that thesame as option 3 above ?

No.

The first item where I mentioned Ltd Co was regarding #3.
The second item where I mentioned umbrella was regarding #2.
The third item where I mentioned agency was regarding #1.

BR14 gave the same final advice as me but bypassed the waffle.

[BR14]

option 2, is a standard umbrella? <automatically PAYE>, or some weird construct?
if standard, compare agency PAYE take home with umbrella take home, (they should give you approximate calculations), and pick the best one.
setting up a Ltd would be daft, really
IANAFA

[platforminc]

Thanks for the reply, just to ensure that i am not using the wrong terms. The options from the agency are as follows

1. PAYE with the agency
2. Umbrella with PAYE engagement
3. PSC with deductions (i.e. all NIC’s and PAYE tax to be deducted prior to payment to the PSC/Ltd company)

The alst option you described below, is that thesame as option 3 above ?

There is no benefit to be had from forming a new company.

If you have a Ltd Co, you could accept payments into that net of taxes but why you'd do that I don't know.

Umbrella will see you paying employers and employees NIC plus their fee so you could end up significantly worse off if the client don't make a specific agreement with them. I don't know how likely or feasible that is.

Agency payroll is probably the closest to a true payroll solution, assuming they are not charging you for the processing and it's part of their fee to the client and they're only deducting employee-type taxes, not the whole shebang like an umbrella would.


I would ask the agent for an illustration for their solution, then contact the shortlisted umbrellas for an illustration and take your pick.