cheekymonkey:
Conor, Im going to ignore your rudeness and say that your posts seem very informative. So much so that Im going to make enquiries about the points you make. I`m going off what I was told by the agency, and from the gist of the posts above is making me question how legitimate it all is.
Ive just read this back and "Im going off what I was told by the agency", does seem a bit daft!!
I’ll gladly accept that - people trust those in a position of authority to know what they’re on about.
Everything I’ve said is on HMRC website albeit a bit of a mare to find. With the meals, its one of those things thats abused quite a lot - even E.S does it although I gather they sorted out an individual agreement with the tax office so its only a flat daily rate, not per meal.
The whole umbrella company thing is a scam. Agencies get out of employers obligations and a chunk of tax for the princely sum of paying you £1/hr or so. The use of umbrella companies is exploiting a loophole but it is one that has been tried before in the IT industry. Where it will fall over and where the HMRC will ultimately win is the argument of “substitution” which they used to send a lot of IT contractors and their “customers” some big fat tax bills.
Under the rules and tests as to whether a position is self employed, one of the biggies is you must be able to substitute someone to do the work you’re doing. For example, if the agency book you to work at Bobby Haulage tomorrow then to meet the HMRC rules of substitution you must be freely able to send in me, Coffeeholic or any other HGV driver if you want without the need to get permission from anyone. Will your agency let you do that even though they’re not signed up to the agency?
The fact you are doing work via a Ltd company or umbrella company doesn’t alter the need to meet the rules on substitution which is the incorrect assumption the agencies are making and which will be their ultimate downfall.
These are basic tests HMRC apply. You will notice that you answer yes to all the first questions and only yes to one of the second set.
If you can answer ‘Yes’ to all of the following questions, you are probably an employee.
Do you have to do the work yourself?
Can someone tell you at any time what to do, where to carry out the work or when and how to do it?
Do you work a set amount of hours?
Can someone move you from task to task?
Are you paid by the hour, week, or month?
Can you get overtime pay or bonus payment?
If you can answer ‘Yes’ to all of the following questions, it will usually mean you are self-employed.
Can you hire someone to do the work for you or engage
helpers at your own expense?<
Do you risk your own money?
Do you provide the main items of equipment you need to do your job, not just the small tools many employees provide for themselves?
Do you agree to do a job for a fixed price regardless of how long the job may take?
Can you decide what work to do, how and when to do the work and where to provide the services?
Do you regularly work for a number of different people?
Do you have to correct unsatisfactory work in your own time and at your own expense?
Will people get bills when HMRC clamp down on this? Only the HMRC can decide. I think that personally, I’d be putting aside what the umbrella company are saying are expenses in case HMRC do decide to bill people rather than just going after the agencies.
