Reply to: How do you invoice now if a contract is within IR35?

[ComplianceLady]

Most MSP's are offering deemed payment service (as no one else will do it) Out of the hundreds of contractors I've spoken to who are flipping there's 2 that want to remain through PSC. They have other income through PSC. Whilst majority won't offer true inside IR35 it will still happen post 6 April

[Paralytic]

Why? It simply confuses your accounting. If they are determined to treat you as inside IR35 and pay you accordingly, then they should put your net pay into your personal account, just like any other worker.

Agreed, but that's what the OP wants and is assuming it can be done. I just wondered if he'd actually asked the client/agency (not clear if he's direct with client or not).

[eek]

Why? It simply confuses your accounting. If they are determined to treat you as inside IR35 and pay you accordingly, then they should put your net pay into your personal account, just like any other worker.

Yep - it's a personal contract so they should be making the OP an employee or the OP should be walking away.

I suspect if the OP did walk away the company may have a change of opinion if they cannot source the skills elsewhere which is likely to be the case,

[malvolio]

If that's what you found, then you were either reading the wrong things or misunderstanding. IR35 tests are applied against each and every contract/role on its own merits, independent of any other contracts that Ltd company may have active at the same time.

Have you asked your client/agency if they are willing to make deemed payments (net of taxes) directly into your Ltd company? Has anyone mentioned the need to move to an Umbrella engagement for this contract?

Why? It simply confuses your accounting. If they are determined to treat you as inside IR35 and pay you accordingly, then they should put your net pay into your personal account, just like any other worker.

[eek]

Thank you to everyone who replied. I appreciate you taking the time to help.

Just to add some information here and why i asked the original question:

Before I started this contract I was already a limited company providing services to multiple clients which I invoiced and received payments from, I still have these clients. Early last year I was asked to provide services to a business on a contract for x months, billed on a day rate, invoicing them per month through my ltd company. This is exactly as I do non-contract work for other clients other than I do it on a day rate (and I was provided with equipment to access their internal network, attend progress meetings, etc) so I just did this as this is how I normally do things: I do work through my ltd company, I invoice from my ltd company, my company gets paid, My company pays me after taking off tax, national insurance, etc.

When I got knowledge of the IR35 changes I did look through HMRC, Google, etc to find information but the information was more related to individuals who have a limited company solely for the purpose of working for 1 client, which is not the case for me, hence my original question.

So you are in the boat I would be in except that if any customer is deciding I'm their employee they aren't remaining a customer...

With multiple customers it's just not worth the hassle...

[cojak]

Thanks for the clarification wilaxo

[Paralytic]

When I got knowledge of the IR35 changes I did look through HMRC, Google, etc to find information but the information was more related to individuals who have a limited company solely for the purpose of working for 1 client, which is not the case for me, hence my original question.

If that's what you found, then you were either reading the wrong things or misunderstanding. IR35 tests are applied against each and every contract/role on its own merits, independent of any other contracts that Ltd company may have active at the same time.

Have you asked your client/agency if they are willing to make deemed payments (net of taxes) directly into your Ltd company? Has anyone mentioned the need to move to an Umbrella engagement for this contract?

[wilaxo]

Thank you to everyone who replied. I appreciate you taking the time to help.

Just to add some information here and why i asked the original question:

Before I started this contract I was already a limited company providing services to multiple clients which I invoiced and received payments from, I still have these clients. Early last year I was asked to provide services to a business on a contract for x months, billed on a day rate, invoicing them per month through my ltd company. This is exactly as I do non-contract work for other clients other than I do it on a day rate (and I was provided with equipment to access their internal network, attend progress meetings, etc) so I just did this as this is how I normally do things: I do work through my ltd company, I invoice from my ltd company, my company gets paid, My company pays me after taking off tax, national insurance, etc.

When I got knowledge of the IR35 changes I did look through HMRC, Google, etc to find information but the information was more related to individuals who have a limited company solely for the purpose of working for 1 client, which is not the case for me, hence my original question.

[northernladuk]

It's a simple fact that a large number of contractors are/soon-to-be-were disguised employees and have become accidental directors because it was the most tax efficient method (at the time) of extracting funds from the company. They had/have no intention of being business owners.

I get that but how does that stop them at least using google with their livelihood in on the line?

[eek]

As I said, you can go through the ltd co with deemed payments as you say, however show me an inside role where the agency is happy for this to happen

Under the new rules as an agency I wouldn't be insisting on an umbrella at any company that doesn't have a blanket ban on PSCs. For HMRC have changed how SDSs should be issued and that could open a whole new world of pain for the agency...

[Paralytic]

Sadly I don't think it is but can't fathom how on earth someone is responsible for their own income bringing in upwards of 60k a year has to ask a question like this without attempting to do a bean of research themselves. Just mind blowing.

It's a simple fact that a large number of contractors are/soon-to-be-were disguised employees and have become accidental directors because it was the most tax efficient method (at the time) of extracting funds from the company. They had/have no intention of being business owners.

[northernladuk]

I assume this is a joke post, but in the off chance its not....

Sadly I don't think it is but can't fathom how on earth someone is responsible for their own income bringing in upwards of 60k a year has to ask a question like this without attempting to do a bean of research themselves. Just mind blowing.

I wonder what the OP knows about the risks about moving inside to outside in the same gig.

[SimonMac]

There is no reason why you can't use your limited company with deemed payments.

That would allow you to appeal an SDS determination and potentially return to outside IR35

However if the contract is definitely inside I would suggest moving to an umbrella company as it will be cheaper.

Fairpay are £30 a month if you don't care about a pension that much, Clarity is more but would be recommended if you do care about putting money into a pension scheme.

As I said, you can go through the ltd co with deemed payments as you say, however show me an inside role where the agency is happy for this to happen

[eek]

I assume this is a joke post, but in the off chance its not....

You don't invoice for inside roles, it has nothing to do with your limited company (for the those who will come back with yes you can invoice an inside role thought your limited company show me an agency who will willingly work this way).

You are employed by your umbrella company and they invoice on your behalf

There is no reason why you can't use your limited company with deemed payments.

That would allow you to appeal an SDS determination and potentially return to outside IR35

However if the contract is definitely inside I would suggest moving to an umbrella company as it will be cheaper.

Fairpay are £30 a month if you don't care about a pension that much, Clarity is more but would be recommended if you do care about putting money into a pension scheme.

[SimonMac]

I have a contract which maybe deemed in IR35. I usually invoice the company for £5000 per month.

If the contract is deemed in IR35 I understand the company will take tax/national insurance from this amount, however my companies invoice still shows £5000 to be paid, how do I show on my end why I didn't get paid £5000?

I invoice through my limited company, I receive a payslip from my company.

I don't understand how my limited company can show it has received less due to this and account for that when the amount being taken off is related to me as an individual not the limited company.

I assume this is a joke post, but in the off chance its not....

You don't invoice for inside roles, it has nothing to do with your limited company (for the those who will come back with yes you can invoice an inside role thought your limited company show me an agency who will willingly work this way).

You are employed by your umbrella company and they invoice on your behalf