caught this on the radio this morning, will this change wages for agency workers? Listen from 35 minutes onwards bbc.co.uk/sounds/play/m000d1tj
Its a BBC link so you have to register / login.
There has been other media about IR35 and its consequences to come at the start of April. As I read it, the responsibility lies fairly well on the employer. Perhaps I read it wrong, but the media was saying that whilst IR35 will impact on additional contributions by the employer, simply being IR35 does not entitle the person to the other employee benefits such as holiday etc.
It seems to be HMRC’s way of reducing the ways a person can reduce their tax payments rather like they are trying to cut back on Limited Company systems where its a single person involved and using it as a vehicle to get company dividends rather than usual taxable income. Its coming and many are unsure how it will impact in lots of areas, not just drivers.
They’re not new rules, IR35 has existed for decades. All that is changing is now it is the responsibility of the client (aka agency) to decide if you’re in IR35 instead of you.
Its coming and many are unsure how it will impact in lots of areas, not just drivers.
You should be on IT contractor groups and forums. It’s basically brought it all to an end. Most companies are telling the contractors that they either go on PAYE or out the door, companies aren’t taking on new contractors.
To be honest the reason for all of this tightening up lies at their doors. The vast majority of those working in the IT sector were doing it. These people were charging often £500+ PER DAY, working just the same as an employee and paying bugger all tax.
Conor:
They’re not new rules, IR35 has existed for decades. All that is changing is now it is the responsibility of the client (aka agency) to decide if you’re in IR35 instead of you.Its coming and many are unsure how it will impact in lots of areas, not just drivers.
You should be on IT contractor groups and forums. It’s basically brought it all to an end. Most companies are telling the contractors that they either go on PAYE or out the door, companies aren’t taking on new contractors.
To be honest the reason for all of this tightening up lies at their doors. The vast majority of those working in the IT sector were doing it. These people were charging often £500+ PER DAY, working just the same as an employee and paying bugger all tax.
So whats your prediction on it?
Come April all drivers supplied to Stobarts through logistics people will be PAYE?
There was a section on Jeremy vines show about self.employed tax etc. Tuesday I think.
Basically along lines of a lot.of self employed people contractors .
were advised by experts to be paid in a certain way.
Mainly they weren’t being paid as such.
The money they received was classed a a loan .
So each month your.pay was classed as a loan which you never paid.back.
Now.hmrc are clamping down on it.
edd1974:
There was a section on Jeremy vines show about self.employed tax etc. Tuesday I think.
Basically along lines of a lot.of self employed people contractors .
were advised by experts to be paid in a certain way.Mainly they weren’t being paid as such.
The money they received was classed a a loan .
So each month your.pay was classed as a loan which you never paid.back.
Now.hmrc are clamping down on it.
That’s an interesting take on it. We don’t do that and I don’t know any Ltd co drivers that do. In our case HMRC will lose all the VAT we pay over to them and recover less in income tax. Very bright Sajid. dohhhh!
Conor:
They’re not new rules, IR35 has existed for decades. All that is changing is now it is the responsibility of the client (aka agency) to decide if you’re in IR35 instead of you.Its coming and many are unsure how it will impact in lots of areas, not just drivers.
You should be on IT contractor groups and forums. It’s basically brought it all to an end. Most companies are telling the contractors that they either go on PAYE or out the door, companies aren’t taking on new contractors.
To be honest the reason for all of this tightening up lies at their doors. The vast majority of those working in the IT sector were doing it. These people were charging often £500+ PER DAY, working just the same as an employee and paying bugger all tax.
It isn’t the Agency Connor it is the end client. So if you work for Howdens they will have to issue an SDS (Status Determination Statement) for all their contractors. They then pass it down via the agency to the contractor.
With the new changes coming soon, it will be interesting to see if HMRC enforce it or do as they normally do and that is do nothing for years and years and then land massive tax bills on individuals as they have done with the loan charge and the managed service company legislation.
Sand Fisher:
edd1974:
There was a section on Jeremy vines show about self.employed tax etc. Tuesday I think.
Basically along lines of a lot.of self employed people contractors .
were advised by experts to be paid in a certain way.Mainly they weren’t being paid as such.
The money they received was classed a a loan .
So each month your.pay was classed as a loan which you never paid.back.
Now.hmrc are clamping down on it.That’s an interesting take on it. We don’t do that and I don’t know any Ltd co drivers that do. In our case HMRC will lose all the VAT we pay over to them and recover less in income tax. Very bright Sajid. dohhhh!
I’m wondering what VAT and Income tax will be lost by the Government?
How so?
Sent from my SM-G930F using Tapatalk
robbo99.:
With the new changes coming soon, it will be interesting to see if HMRC enforce it or do as they normally do and that is do nothing for years and years and then land massive tax bills on individuals as they have done with the loan charge and the managed service company legislation.
Should they enforce new rules from day one?
Or should they give a grace period to allow all to get their house in order, before pursuing expensive investigations of many separate individuals?
.
Different ways of viewing the same actions, maybe?
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Franglais:
robbo99.:
With the new changes coming soon, it will be interesting to see if HMRC enforce it or do as they normally do and that is do nothing for years and years and then land massive tax bills on individuals as they have done with the loan charge and the managed service company legislation.Should they enforce new rules from day one?
Or should they give a grace period to allow all to get their house in order, before pursuing expensive investigations of many separate individuals?
.
Different ways of viewing the same actions, maybe?Sent from my SM-G930F using Tapatalk
It depends what a grace period is, HMRC tend to take multiple years to actually do anything when it comes down to tax avoidance schemes, as they call them.
Can anybody really take HMRC serious when, as an example, disguised remuneration schemes? HMRC used contractors to work for yes…HMRC whilst being paid via disguised remuneration schemes. Where were their due diligence and other checks carried out? Utter farce. So those contractors have fallen foul of tax avoidance schemes whilst carrying out work for HMRC! You couldn’t make it up.
robbo99.:
With the new changes coming soon, it will be interesting to see if HMRC enforce it or do as they normally do and that is do nothing for years and years and then land massive tax bills on individuals as they have done with the loan charge and the managed service company legislation.
The enforcing doesn’t come from HMRC! The end client just wont take contractors on as er contractors! It is en effect self policing.
Worst thing about all.tbis HMRC want there tax back. Fair enough. Yet your self.employed seek advice from experts.
So surley the onus should be on the experts who told you do what ever.
Sand Fisher:
robbo99.:
With the new changes coming soon, it will be interesting to see if HMRC enforce it or do as they normally do and that is do nothing for years and years and then land massive tax bills on individuals as they have done with the loan charge and the managed service company legislation.The enforcing doesn’t come from HMRC! The end client just wont take contractors on as er contractors! It is en effect self policing.
Yes true, but it is down to HMRC to enforce End clients to comply, those that don’t comply with the changes will face hefty penalties if HMRC investigate them or just sit on their hands as per usual.
It’s nice to see HMRC are going for the small business owner again, I’ve alredy had to fill in one of these for one of the companies I sub for, it asks if you have a company email, phone etc and do you work elsewhere as well. It would be nice if HMRC went around closing the loopholes that billionaires and corporations use, that would really bring some cash in, but once again it’s the common man who is expected to pay while the rich buy another yacht 
noisycarl:
It’s nice to see HMRC are going for the small business owner again, I’ve alredy had to fill in one of these for one of the companies I sub for, it asks if you have a company email, phone etc and do you work elsewhere as well. It would be nice if HMRC went around closing the loopholes that billionaires and corporations use, that would really bring some cash in, but once again it’s the common man who is expected to pay while the rich buy another yacht
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Sand Fisher:
In our case HMRC will lose all the VAT we pay over to them and recover less in income tax. Very bright Sajid. dohhhh!
No they won’t lose any VAT you paid to them, it just gets paid by the next person up the chain. They didn’t gain from the VAT you paid because the VAT you charged your customer, the agency, was offset against their VAT bill for the VAT they’d charged their client. But if you knew anything about business and being properly VAT registered and running a proper VAT account instead of just being VAT registered to gain more money in your pocket from the flat VAT rates you’d know that.
Quite clearly you have no idea how VAT works and are just another example of someone who claims to be a business whilst knowing no more about being a business than an employee and are just yet another “mickey mouse” self employed.
Franglais:
I’m wondering what VAT and Income tax will be lost by the Government?
How so?Sent from my SM-G930F using Tapatalk
No VAT will be lost by the government, in fact given the abuse of the flat VAT rate the government will actually gain more from it. They’ll also gain more in income tax too, at least £400 for every self employed driver who was using the “small earnings and dividends” method of getting money out of their Ltd due to the fact they can no longer benefit from the £2000 dividend tax allowance. They’ll also get more employers NI too, an additional £220 per self employed driver as every business gets a £2000 employers NI allowance they can offset against their employers NI bill.
So in short for every Ltd self employed driver that ends up on PAYE the HMRC will benefit to the tune of at least £620 per driver.
robbo99.:
It depends what a grace period is, HMRC tend to take multiple years to actually do anything when it comes down to tax avoidance schemes, as they call them.
There is no grace period. IR35 has been in place for decades.
Conor:
Franglais:
I’m wondering what VAT and Income tax will be lost by the Government?
How so?Sent from my SM-G930F using Tapatalk
No VAT will be lost by the government, in fact given the abuse of the flat VAT rate the government will actually gain more from it. They’ll also gain more in income tax too, at least £400 for every self employed driver who was using the “small earnings and dividends” method of getting money out of their Ltd due to the fact they can no longer benefit from the £2000 dividend tax allowance. They’ll also get more employers NI too, an additional £220 per self employed driver as every business gets a £2000 employers NI allowance they can offset against their employers NI bill.
So in short for every Ltd self employed driver that ends up on PAYE the HMRC will benefit to the tune of at least £620 per driver.
robbo99.:
It depends what a grace period is, HMRC tend to take multiple years to actually do anything when it comes down to tax avoidance schemes, as they call them.There is no grace period. IR35 has been in place for decades.
Franglais was questioning if there would be a grace period for the new changes, I was referring to the fact that HMRC sit on their hands when it comes to tax avoidance schemes, no grace period as far as I’m concerned, just appears to be a form of entrapment on HMRC’ s behalf.
Been told today by my agency, that unless there is any change after April Wincanton and DHL won’t be using Ltd drivers.