Got an email from an agency yesterday offering me a ‘job’ with 40+ hours a week with a decent hourly rate. When u enquired further turns out it was the rate for LTD.
I replied I wasn’t interested as I though it was immoral and not legal for me to work full-time at only one company and claim I was in IR35. I went on to point out that agencies/companies should just pay a decent rate for PAYE and not expect drivers to potentially be in trouble with the Inland Revenue. LTD looks like a good deal for everyone but in reality it’s just haulage companies racing to the bottom and getting cheap drivers again with the driver facing a huge liability and having reduced rights and protection.
The agency came back and said they had loads of drivers on LTD, working full time with them and it wa ‘legal’. I replied I didn’t think so and neither would the taxman.
I have noticed a lot of agencies advertising for LTD and some only accepting LTD for certain jobs.
I do know several LTD drivers who have an arrangement to say they do a few shifts for their mates and their mates do a lot of ew shifts on behalf on them. In reality this is not the case. I am sure the taxman is fully aware of this evasion of tax and NI.
If I am wrong could someone clarify, if not, why are companies still accepting LTD and will the Inland Revenue eventually catch up and start issuing penalties.
steve_watt:
If I am wrong could someone clarify, if not, why are companies still accepting LTD and will the Inland Revenue eventually catch up and start issuing penalties.
Looks to me like you are perfectly correct about the situation you describe. Not legal at all.
No one can predict the future, but I would be surprised if those abusing the system got away with it for ever.
The way it has been implemented by agencies is that you may work for multiple clients and be substituted, or substitute at any time.
From HMRCs point of view the right of substitution clause within IR35 has been adhered to.
You are not claiming any employment benefits from any of the various companies your Ltd company provides services to - holidays, pension etc.
As far as HMRC is concerned you are conformant and not breaking any rules.
More importantly, when IR35 was started liability for non conformance with IR35 was with the Ltd company providing the service, but from April 2021 liability has been with the companies taking on the contractor. This meant that before April 2021 companies did not care if the Ltd company was non-compliant because the Ltd driver would be liable for any non-compliance fines. Now the companies taking on the Ltd company drivers are liable so they ensure that everything is conformant.
In my opinion the implementation of IR35 has not been very well thought through and badly implemented. The change to the enforcement rules in April 2021 resulted in a sudden withdrawing of foreign Ltd company drivers because companies would no longer employ them, it also meant a lot of occasional UK drivers didn’t want the bother of going PAYE, resulting in a driver shortage. The government blamed brexit !
Its all a bit ‘swings and roundabouts’ which is the best. Its down to the individual circumstances, how informed they are and what they want out of life.
I forget the ins and outs of it but i have a feeling ir35 allows for self employment and ltd workers provided they use a properly registerd accountant. I know that when ir35 came in all the people that were on agency were moaning that instead of 15 quid a week for “wage fees” they had to pay 25. The way the agency would get round the sole employment with one company is that you work for the agency and can be sent anywhere that your needed. the fact you have a weeks contract with one company doesnt mean you wont be sent to a different one next week. Im guessing that after 13 weeks you have the option of going onto the clients books.
Just my pennys worth here but i dont blame you for walking away from a ltd job if that is the only option. It is a scam and usualy only about a pound more than the paye rate. For that extra pound you have to pay for your holliday pay and employers stamp
rhudson:
The way it has been implemented by agencies is that you may work for multiple clients and be substituted, or substitute at any time.
From HMRCs point of view the right of substitution clause within IR35 has been adhered to.
You are not claiming any employment benefits from any of the various companies your Ltd company provides services to - holidays, pension etc.
As far as HMRC is concerned you are conformant and not breaking any rules.
More importantly, when IR35 was started liability for non conformance with IR35 was with the Ltd company providing the service, but from April 2021 liability has been with the companies taking on the contractor. This meant that before April 2021 companies did not care if the Ltd company was non-compliant because the Ltd driver would be liable for any non-compliance fines. Now the companies taking on the Ltd company drivers are liable so they ensure that everything is conformant.
In my opinion the implementation of IR35 has not been very well thought through and badly implemented. The change to the enforcement rules in April 2021 resulted in a sudden withdrawing of foreign Ltd company drivers because companies would no longer employ them, it also meant a lot of occasional UK drivers didn’t want the bother of going PAYE, resulting in a driver shortage. The government blamed brexit !
Its all a bit ‘swings and roundabouts’ which is the best. Its down to the individual circumstances, how informed they are and what they want out of life.
As I see it.
#2 I would hesitate to say definitely what HMRC finds is, or isn`t, compliant.
#1 It is for the worker/contractor to provide a service, and decide whether or not they will work, or substitute in a different worker. If an agency decides to send in a substitute worker it is still one employee, being substituted for a different employee.
#3 the bother of going PAYE? As opposed to the ease of running a legitimate company providing services and all that entails? 
cooper1203:
I forget the ins and outs of it but i have a feeling ir35 allows for self employment and ltd workers provided they use a properly registerd accountant. I know that when ir35 came in all the people that were on agency were moaning that instead of 15 quid a week for “wage fees” they had to pay 25. The way the agency would get round the sole employment with one company is that you work for the agency and can be sent anywhere that your needed. the fact you have a weeks contract with one company doesnt mean you wont be sent to a different one next week. Im guessing that after 13 weeks you have the option of going onto the clients books.
Just my pennys worth here but i dont blame you for walking away from a ltd job if that is the only option. It is a scam and usualy only about a pound more than the paye rate. For that extra pound you have to pay for your holliday pay and employers stamp
The length of service or number of employers is not the issue.
An employee can work
1 day for Alice
1 day for Bob
1 day for Charlotte
etc… for 50 days… they are still an employee.
If the worker is employed by an agency then exactly that: they are the employee of the agency.
They may be the employee of 20 different agencies. But an employee is still an employee.
The real point of the IR35 legislation and its subsequent enforcement was to create a situation where people were put off using Ltd. either because they did not understand it or could not be bothered to research it.
It seems to have succeeded in that respect at least.
Franglais:
cooper1203:
I forget the ins and outs of it but i have a feeling ir35 allows for self employment and ltd workers provided they use a properly registerd accountant. I know that when ir35 came in all the people that were on agency were moaning that instead of 15 quid a week for “wage fees” they had to pay 25. The way the agency would get round the sole employment with one company is that you work for the agency and can be sent anywhere that your needed. the fact you have a weeks contract with one company doesnt mean you wont be sent to a different one next week. Im guessing that after 13 weeks you have the option of going onto the clients books.
Just my pennys worth here but i dont blame you for walking away from a ltd job if that is the only option. It is a scam and usualy only about a pound more than the paye rate. For that extra pound you have to pay for your holliday pay and employers stamp
The length of service or number of employers is not the issue.
An employee can work
1 day for Alice
1 day for Bob
1 day for Charlotte
etc… for 50 days… they are still an employee.
If the worker is employed by an agency then exactly that: they are the employee of the agency.
They may be the employee of 20 different agencies. But an employee is still an employee.
yes but i am still self employed weather i work for 20 different companies or 1. The o/p’s question was was it legal to work for one company.
I susspect the magic number (i dont know this for fact) is 13 weeks then your considered to be an employee as far as self employed legislation works. As 13 weeks seems a little bit of a random number and the majority of temp to perm jobs seem to be that you get taken on to the clients books after 13 weeks.
just to add when you go ltd with an agency and are paid through some wage company 99% of the time the wage company changes its name every couple of weeks and as technicaly your employed by them and not the agency you work for a different company every time they change thier name.
cooper1203:
yes but i am still self employed weather i work for 20 different companies or 1. The o/p’s question was was it legal to work for one company.
I susspect the magic number (i dont know this for fact) is 13 weeks then your considered to be an employee as far as self employed legislation works. As 13 weeks seems a little bit of a random number and the majority of temp to perm jobs seem to be that you get taken on to the clients books after 13 weeks.
cooper1203:
just to add when you go ltd with an agency and are paid through some wage company 99% of the time the wage company changes its name every couple of weeks and as technicaly your employed by them and not the agency you work for a different company every time they change thier name.
There is no magic number.
A self employed person can, sometimes, work for one company for years.
An employee can work for many different companies.
Have you checked this?
gov.uk/employment-status/se … contractor
Click through to get here:
tax.service.gov.uk/check-em … disclaimer
Try it. Don`t fiddle about to get the result you want. Be honest with ti.
I did Ltd from 2013 till 2021 and if you got a rough idea what you were doing you could do very well out of it. But when the government cracked down on it, I like most knew it was time to shut the trading business down and go PAYE.
If you carry on you may never get checked, but the risk is so much higher and if you take HMRC on there will only be one winner and it won’t be you. Famous TV presenters learnt the hard way and they had the best lawyers.
Yes it was a gravy train for quite a few years but it’s over now, probably the company’s who use you are not the people who you want to work for, why would you employ someone on Ltd when you could end up going for tea and biscuits with the TC. It will only be company’s who carnt get drivers in a normal way.
I am still offered jobs on Ltd and the answer is no thanks.
steve_watt:
Got an email from an agency yesterday offering me a ‘job’ with 40+ hours a week with a decent hourly rate. When u enquired further turns out it was the rate for LTD.
I replied I wasn’t interested as I though it was immoral and not legal for me to work full-time at only one company and claim I was in IR35. I went on to point out that agencies/companies should just pay a decent rate for PAYE and not expect drivers to potentially be in trouble with the Inland Revenue. LTD looks like a good deal for everyone but in reality it’s just haulage companies racing to the bottom and getting cheap drivers again with the driver facing a huge liability and having reduced rights and protection.
The agency came back and said they had loads of drivers on LTD, working full time with them and it wa ‘legal’. I replied I didn’t think so and neither would the taxman.
I have noticed a lot of agencies advertising for LTD and some only accepting LTD for certain jobs.
I do know several LTD drivers who have an arrangement to say they do a few shifts for their mates and their mates do a lot of ew shifts on behalf on them. In reality this is not the case. I am sure the taxman is fully aware of this evasion of tax and NI.
If I am wrong could someone clarify, if not, why are companies still accepting LTD and will the Inland Revenue eventually catch up and start issuing penalties.
There was never anything “illegal” prior to the overhaul of IR35 and it still isn’t “illegal” post reforms. You mention tax evasion, there is no tax evasion regarding IR35 full stop. The government/HMRC refer to it as tax avoidance, but for the umpteenth time, tax avoidance is perfectly legal.
robbo99.:
There was never anything “illegal” prior to the overhaul of IR35 and it still isn’t “illegal” post reforms. You mention tax evasion, there is no tax evasion regarding IR35 full stop. The government/HMRC refer to it as tax avoidance, but for the umpteenth time, tax avoidance is perfectly legal.
In the same vein, driving at 70mph is perfectly legal: In a car on a motorway.
In a truck in a 20 limit it isn`t.
IR35 is legal, when it is legal.
It isnt legal when an employee camouflages there employment status, to appear self employed, when they arent.
Franglais:
robbo99.:
There was never anything “illegal” prior to the overhaul of IR35 and it still isn’t “illegal” post reforms. You mention tax evasion, there is no tax evasion regarding IR35 full stop. The government/HMRC refer to it as tax avoidance, but for the umpteenth time, tax avoidance is perfectly legal.
In the same vein, driving at 70mph is perfectly legal: In a car on a motorway.
In a truck in a 20 limit it isn`t.
IR35 is legal, when it is legal.
It isnt legal when an employee camouflages there employment status, to appear self employed, when they arent.[/quot
Still not illegal nor is tax avoidance, though the government/HMRC would have you believe so.
robbo99.:
Franglais:
robbo99.:
There was never anything “illegal” prior to the overhaul of IR35 and it still isn’t “illegal” post reforms. You mention tax evasion, there is no tax evasion regarding IR35 full stop. The government/HMRC refer to it as tax avoidance, but for the umpteenth time, tax avoidance is perfectly legal.
In the same vein, driving at 70mph is perfectly legal: In a car on a motorway.
In a truck in a 20 limit it isn`t.
IR35 is legal, when it is legal.
It isnt legal when an employee camouflages there employment status, to appear self employed, when they arent.[/quot
Still not illegal nor is tax avoidance, though the government/HMRC would have you believe so.
Bit of a strange analogy you are making Franglais, obviously exceeding a speed limit is illegal, tax avoidance is not illegal, certain types of avoidance are morally questionable but certainly not illegal. If government had a serious attempt to tighten up on tax legislation then too many of their own would be seriously out of pocket.
cooper1203:
I forget the ins and outs of it but i have a feeling ir35 allows for self employment and ltd workers provided they use a properly registerd accountant. I know that when ir35 came in all the people that were on agency were moaning that instead of 15 quid a week for “wage fees” they had to pay 25. The way the agency would get round the sole employment with one company is that you work for the agency and can be sent anywhere that your needed. the fact you have a weeks contract with one company doesnt mean you wont be sent to a different one next week. Im guessing that after 13 weeks you have the option of going onto the clients books.
Just my pennys worth here but i dont blame you for walking away from a ltd job if that is the only option. It is a scam and usualy only about a pound more than the paye rate. For that extra pound you have to pay for your holliday pay and employers stamp
Just to say, employers don’t pay stamp. Every little employer gets £5000 a year reduced from their Ni. So that should be enough for one person’s wages.