"I’m struggling to recruit contractors because they’ve tightened it up.
As I understand it needs to be for a specific piece of work now, not just an expensive disposable permie. "
Look to work for companies with a smaller turn over as they won't have had to tell hmrc whether or not their contractors are inside or out. |
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By *ook OP Man
over a year ago
london |
Ok so as a limited company who pays corporation tax ...can a supplier deduct tax at source... do you pay tax twice then? Surely if your freelance and paying your own tax as an external ltd company it should not mean deduction at source? Anyone? |
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By (user no longer on site)
over a year ago
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Just a nightmare, blanket outside assessment where I work, regardless of individual circumstances. Contractors already leaving on principle, and lots of projects suffering significantly |
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By (user no longer on site)
over a year ago
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"I’m struggling to recruit contractors because they’ve tightened it up.
As I understand it needs to be for a specific piece of work now, not just an expensive disposable permie. "
Yes, this in summary. Or else you just have to pay 20% higher rates to make up for list wages.
Ultimately, the market will decide how rates move, but they sure as hell won't be going down! |
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By *ild_oatsMan
over a year ago
the land of saints & sinners |
HMRC sell it as levelling up the playing field between employment status and tax status.
Contractor/contingent workers buy their nature have no employment rights with the company they are currently working for and can be hired and fired as per the business requirements.
You take on this status knowing this and as such you negotiate or accept a fee to cover this.
Working now within IR35 means you will now be paying employees and employers NI contributions with no employment rights.
So effectively it’s all risk with no reward....
And this government says it wants to champion entrepreneurs.... IR35 does the exact opposite....
OP I’m guessing that you have had your IR35 determination and been found to be inside the rules.... |
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By *ild_oatsMan
over a year ago
the land of saints & sinners |
"Yes that’s correct... so how does the tax work if you pay tax at source... still have to pay corporation tax... pay accountant etc..."
You will probably need to use an umbrella company....
A lot of companies that manage your accounts are setting up umbrella companies so you can keep your limited company dormant whilst you are working inside IR35. As part of the fees they charge.
Be careful as if you get your work through certain agencies they often insist that you use their preferred list of umbrella companies.... |
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By *ild_oatsMan
over a year ago
the land of saints & sinners |
You only pay corporation tax on profits your ltd company has earned....
Inside IR35 your ltd company will not be invoicing so no earnings to be taxed on.
But if you switch from Outside to Inside IR35 with the same client ... Expect an HMRC investigation on your tax status as they could deem all the work you have done over the last 6 years to be inside IR35 and you will be then liable for back tax and fines ...of potentially 1000’s |
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Been brewing for quite a few years now. I made sure all my accounts were squeaky clean and then jumped ship into perm.
When things shake out I may reactivate my limited company and go back to consultancy again, but I doubt it. |
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By *ild_oatsMan
over a year ago
the land of saints & sinners |
"Been brewing for quite a few years now. I made sure all my accounts were squeaky clean and then jumped ship into perm.
When things shake out I may reactivate my limited company and go back to consultancy again, but I doubt it."
It’s not about your accounts being squeaky clean ...
It’s all about HMRC determining if your work put you inside or outside IR35 off payroll working rules. They can examine all your work contracts going back 6 years |
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"Been brewing for quite a few years now. I made sure all my accounts were squeaky clean and then jumped ship into perm.
When things shake out I may reactivate my limited company and go back to consultancy again, but I doubt it.
It’s not about your accounts being squeaky clean ...
It’s all about HMRC determining if your work put you inside or outside IR35 off payroll working rules. They can examine all your work contracts going back 6 years"
Yep, and I went through every contract I'd worked and every assignment I'd taken on to make sure they were clearly defined and there was no ambiguity.
I wasn't talking squeaky clean in terms of financial accounts but in terms of client/customer accounts - I worded it poorly. |
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By *ensualMan
over a year ago
Sutton |
"I’m struggling to recruit contractors because they’ve tightened it up.
As I understand it needs to be for a specific piece of work now, not just an expensive disposable permie. "
I was on a workshop today that touched on this and the above commentator seems to be right.
It seems that if Main Company (MC) uses Intermediary Company (IC) to use a Consultant (C) then MC has to decide whether C is employed or a genuine consultant. If MC has classified C as consultant and HMRC disagrees then there are circumstances in which MC can become liable for the tax, so a lot of companies are putting consultants on the payroll.
Which I suspect is a pain for the consultant if you are not paid enough to cover your expenses.
Also with the Holmes and Kelly cases contradicting each other it makes forecasting the position difficult. |
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By *ill74Man
over a year ago
New forest area |
I do a lot of contract work, but i do it either through PAYE either through the agency, or using an umbrella c9mapny.
As far as I understand IR35 affects contractors who have their own limited company.
My understanding, right or wrong, is it's aimed at those contractors as they pay less NI through their limited company.
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By *hunky GentMan
over a year ago
Maldon and Peterborough |
It all depends on your role in a company you're working for.
The questionnaire is online and you can still fall outside it depending on the contract.
It only applies to large 'private sector' companies.
PM me if you need any guidance. |
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By *ild_oatsMan
over a year ago
the land of saints & sinners |
HMRC guidance is that contractors should have their IR35 status determined on an individual basis.
If the company you contract for has taken a blanket determination or role based determination then this renders the SDS (status determination statement) invalid and the company then becomes liable.
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