Have umbrella companies told their clients what their plans are after April?

[LisaContractorUmbrella]

I am sure I keep getting this wrong but won't giving notice your brolly mean your last location becomes your permanent one which means you can't claim T&S anyway as it's no longer temporary?

Only if their current assignment is the only one that they've had with the brolly regardless of what their intentions may have been when they initially signed up

[mudskipper]

...regardless of what their intentions may have been when they initially signed up

That point has been the subject of much debate, hasn't it?

[LisaContractorUmbrella]

That point has been the subject of much debate, hasn't it?

Oh yes

[seanraaron]

I got a call from my umbrella asking if I knew about Ltd Co options and I said I did and if I was going that route it would be to dump them and I wasn't interested.

Expenses isn't a significant issue for me; in fact I stopped with that last week, so whatever. I didn't go with an umbrella so I could claim expenses.

[LondonManc]

that really made me chuckle!

They are unlikely to change their minds if that's what you mean - it's far more likely that they will introduce something else alongside all this at the last minute which will effectively stop or slow a mass migration to Ltd. If they don't, the loss to the Treasury could be significant - with PAYE paid at 95% of turnover through a Ltd, the flat rate scheme and the risk that contractors will decide to ignore IR35. Back of a fag packet calculations showed that they could lose an awful lot more money than the changes are going to bring in but if this is all just political paybe that doesn't matter. Who knows what HMRC will do but you can guarantee it won't be anything to make people better off

If the opposite were to happen and Ltd contractors were all forced through umbrella (because we reach a point in hector's tax edicts whereby the hassle involved with Ltd generates very little cash benefit over umbrella) then it would be equally disastrous for the incumbent Chancellor, having to explain why so many British companies are shutting down. Very poorly thought through; clearly a tactical cash grab exercise rather than anything strategic.

[northernladuk]

Only if their current assignment is the only one that they've had with the brolly regardless of what their intentions may have been when they initially signed up

Ouch! So the new guys are going to be totally screwed either way? I wonder how many of them realise this right now?

[LisaContractorUmbrella]

If the opposite were to happen and Ltd contractors were all forced through umbrella (because we reach a point in hector's tax edicts whereby the hassle involved with Ltd generates very little cash benefit over umbrella) then it would be equally disastrous for the incumbent Chancellor, having to explain why so many British companies are shutting down. Very poorly thought through; clearly a tactical cash grab exercise rather than anything strategic.

Couldn't agree more - would have made much more sense for HMG to actually address the problem - according to HMRC far more people than they originally intended now claim tax relief on T&S due to mass moves of low paid workers from permie employment to umbrella companies. This is because IMHO employment costs are getting cripplingly high for companies who operate on a low profit margin (due to demand for low priced goods and services). It would have made much more sense to put in place a threshold under which employers can't transfer workers to an intermediary - this would solve the perceived problem and protect low paid workers. IMO it's a logical move but HMRC and HMG are not famed for their logic

[LisaContractorUmbrella]

Ouch! So the new guys are going to be totally screwed either way? I wonder how many of them realise this right now?

Yep you're right. We are making it clear to newbies but I am not sure how widespread that practice is

[jamesbrown]

We have told our workers and I am pleased to say there has not been a mass exodus

Good to hear, Lisa. Hopefully, this is repeated at other umbrellas, as it wouldn't serve any of us to see a mass exodus.

[LondonManc]

Couldn't agree more - would have made much more sense for HMG to actually address the problem - according to HMRC far more people than they originally intended now claim tax relief on T&S due to mass moves of low paid workers from permie employment to umbrella companies. This is because IMHO employment costs are getting cripplingly high for companies who operate on a low profit margin (due to demand for low priced goods and services). It would have made much more sense to put in place a threshold under which employers can't transfer workers to an intermediary - this would solve the perceived problem and protect low paid workers. IMO it's a logical move but HMRC and HMG are not famed for their logic

They seem to have lost sight of the original problem, which is clearly NIC avoidance by large cos. Instead they're going round tackling a symptom at a time, well down the line from what the original issue was!