And the first leg is removed

[DaveB]

Below is directly off the gov.co.uk website (https://www.gov.uk/guidance/ir35-find-out-if-it-applies). Seems based on these rules we are all already inside IR35 ... i.e. we all work through an intermediary (our own limited company). So, taking this on face value, aren't we all already compliant? My ltd pays me a salary and I pay tax and NI on this. My company also pays employers NI to the legal value based on the salary I take. Each year I take a divi from the company and this is taxed as legally required. The fact that my company does not pay me the full amount it takes from the client each year is irrelevant to the IR35 rule as written below ... it only talks about my 'salary' not my company's 'revenue'.

I know this isn't what the AS has suggested will happen, but reading the below which is a direct quote off the gov website aren't we all OK? This was last updated Aug 2016. Clearly more to it than just this ... but on face value ...!

Uber is a different kettle of fish - it becomes the intermediary and it is liable for the PAYE, NI etc for the drivers so their situation changes completely.

Maybe to limit agency risk they will no longer take a % of day rate but take an introducers fee up from from the end client ... and we invoice client directly. There would then be no other intermediary and it is a clear relationship between myco and the end client. Just then need to prove that there is no SDC and the contract has been reviewed and compliant.


"Who’s affected by IR35
IR35 is also known as ‘intermediaries legislation’. It’s a set of rules that affect your tax and National Insurance if you’re contracted to work for a client through an intermediary. You may need to follow IR35 if you work for a client through an intermediary.

The intermediary can be:

your own limited company
a service or personal service company
a partnership

If IR35 applies then the intermediary has to operate PAYE and National Insurance contributions on any salary or wages it pays to you during the tax year.

The rules are designed to make sure that the right rate of tax and National Insurance is paid for you.

IR35 may also apply if you’re working through an intermediary and you:

or your intermediary, or client are abroad
work in the construction industry
are an office-holder
work with your partner or spouse
are working, through an intermediary, for a charitable organisation
IR35 doesn’t apply if you work for a client through a Managed Service Company (MSC) or agency, for example an employment agency."

What you are missing there is that under IR35 any payments made to your co are treated as "Deemed payments" and should be taxed as personal income under PAYE by your co before paying anything to you.

When IR35 applies, the earnings of your intermediary (your personal service company, limited company or partnership) for that engagement are deemed to be the income of the worker. This is called the deemed employment payment.

https://www.gov.uk/guidance/ir35-wha...-if-it-applies

[SueEllen]

Interesting - I've never come across that before.

The first agency who told me about it 6 years back said it was how they operated in Germany. However I turned down that contract as the client refused to remove my name from it as one of the parties. Since then I've had a contract like that in the UK and have been offered some others.

Clients in the UK do it so they know exactly how much they are paying and can ensure you get the money. However you generally get paid slower than through the agency.