Off-Payroll question in Tax Return

[gtlc]

Can anyone advise if the “Is this employment income from inside off-payroll working engagements?” question (in the 20/21) Self assessment, should be answered yes or no. I work fully through an umbrella company and do not have a limited company.

Thanks.

[ladymuck]

The notes on section 8 are delightfully obscure:

Box 8 If this employment income is from inside off-payroll working engagements

If you have provided your services through your own limited company, or another type of intermediary, such as:
• a partnership
• a personal service company
• an individual

to a client, who may also be known as:
• the engager
• the hirer
and had income tax and National Insurance deducted from your fee and paid to HMRC,
put ‘X’ in box 8.

As you're working through an umbrella, where they deal with all your tax deductions, I would not put a X in the box. As an umbrella is not one of the three described intermediary types.

[northernladuk]

How come you are doing a self assessment if you are through a brolly? Have you been through one all year or shut your company down at some point in that tax year?

[eek]

Reading what LM says it seems to relate to you you receiving deemed payments which seems unlikely.

I would be asking HMRC, your accountant or your umbrella firm on how to answer the question as I can think of reasons why both possible answers may be correct.

[ladymuck]

Reading what LM says it seems to relate to you you receiving deemed payments which seems unlikely.

I would be asking HMRC, your accountant or your umbrella firm on how to answer the question as I can think of reasons why both possible answers may be correct.

I did wonder if I might be overthinking it if I went down the "client says I'm inside and need to work via an umbrella" route.

My view was, as a distinct employment with an umbrella, you would leave it unticked.

[eek]

I did wonder if I might be overthinking it if I went down the "client says I'm inside and need to work via an umbrella" route.

My view was, as a distinct employment with an umbrella, you would leave it unticked.

And my comment is based on a number of umbrella contracts that I've seen that actually pass the employment side of things back to the agency..

To say that a lot of FSCA umbrellas are dodgy would be an understatement

[gtlc]

How come you are doing a self assessment if you are through a brolly? Have you been through one all year or shut your company down at some point in that tax year?

I've been working exclusively through the umbrella company, but my final dividend before company closure, was during 20/21.

[gtlc]

Reading what LM says it seems to relate to you you receiving deemed payments which seems unlikely.

I would be asking HMRC, your accountant or your umbrella firm on how to answer the question as I can think of reasons why both possible answers may be correct.

I no longer have an accountant and the idea of calling HMRC to tell them I used to be outside IR35 and now I'm not, gives me the fear :-) I've asked the Umbrella company, but I think their reply will be along the lines of, "We offer a tax return service for £165, would you like to sign up for that?". Hopefully I'll hear back from them in the next day or so.

[hobnob]

I'm in a similar position to the OP, and this part of self-assessment process is a bit counter-intuitive.
Q: "Is this employment income from inside off-payroll working engagements?"
A: "No - my contract is inside IR35, but the income isn't."

I'm going by this article (on this website):
Contractors, HMRC has fortunately clarified ‘intermediaries’ should not include umbrella companies (contractoruk.com)

To answer NLUK's question, I was working through the same umbrella company for the whole of the tax year, but they've charged me too much income tax. I'm sure that HMRC would automatically give me a refund in a few months, but I can speed up the process by doing a SATR. This also means that I can include other deductions, e.g. donations to charity and professional memberships (BCS).

[eek]

I'm in a similar position to the OP, and this part of self-assessment process is a bit counter-intuitive.
Q: "Is this employment income from inside off-payroll working engagements?"
A: "No - my contract is inside IR35, but the income isn't."

I'm going by this article (on this website):
Contractors, HMRC has fortunately clarified ‘intermediaries’ should not include umbrella companies (contractoruk.com)

To answer NLUK's question, I was working through the same umbrella company for the whole of the tax year, but they've charged me too much income tax. I'm sure that HMRC would automatically give me a refund in a few months, but I can speed up the process by doing a SATR. This also means that I can include other deductions, e.g. donations to charity and professional memberships (BCS).

Working through an umbrella company who are paying you as an employee then the answer is No.