The Work Thread

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Corazon de Leon

PostRe: The Work Thread
by Corazon de Leon » Wed Oct 18, 2017 11:45 am

Christ, unlucky OS - hopefully your situation at work improves a bit in terms of job security.

There was a big hoo-hah in my office last week in one of the other departments, no idea what happened but a few people were pretty upset.

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OnlyShallow
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PostRe: The Work Thread
by OnlyShallow » Wed Oct 18, 2017 11:57 am

Tomous wrote:Anyone have much experience with IR35 and getting paid as a contractor into a private company?

I used to work for a management accountants dealing with LTD co contractors.

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Many Lives -> 49 MP wrote:People like you OnlyShallow are terrible banana splits. I hate you forever.
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Green Gecko
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PostRe: The Work Thread
by Green Gecko » Wed Oct 18, 2017 12:28 pm

Tomous wrote:Anyone have much experience with IR35 and getting paid as a contractor into a private company?

It basically comes down to whether you are only working for them or not.

If they are your only client, you're an employee.

If you have several clients, you keep your tax obligations.

In the first scenario you want to make sure you're getting paid what you want considering the 20% tax rate for second job, or request HMRC treat it as your first job so you get your tax allowance on that. In the later scenario you want to make sure you're covering your tax, national insurance and pension arrangements.

Ultimately you have the trump card so just make sure you're covered. But generally if you're employed by them they'll want to pay you less for the hassle.

The other thing you can do is use an umbrella company which I did. You can still claim all your expenses and such and the charge should be around 25 quid per payroll. They're sometimes shitty about what you can claim though. Then you don't have to worry about it, HMRC don't care as long as you're on PAYE and paying tax and NI if you qualify as an employee under IR35.

There's lots of scary stuff in blogs etc about IR35 because of two reasons: contractors who hate the government and don't want to pay any tax at all, and accountants who want to blindside you to convince you to pay them a wedge to sort it out for you. It really isn't that complicated.

My best advice is simple. Charge more.

"It should be common sense to just accept the message Nintendo are sending out through their actions."
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PostRe: The Work Thread
by Hexx » Wed Oct 18, 2017 12:35 pm

Green Gecko wrote:
Tomous wrote:Anyone have much experience with IR35 and getting paid as a contractor into a private company?

It basically comes down to whether you are only working for them or not.

If they are your only client, you're an employee.

If you have several clients, you keep your tax obligations.

In the first scenario you want to make sure you're getting paid what you want considering the 20% tax rate for second job, or request HMRC treat it as your first job so you get your tax allowance on that. In the later scenario you want to make sure you're covering your tax, national insurance and pension arrangements.

Ultimately you have the trump card so just make sure you're covered. But generally if you're employed by them they'll want to pay you less for the hassle.

The other thing you can do is use an umbrella company which I did. You can still claim all your expenses and such and the charge should be around 25 quid per payroll. They're sometimes shitty about what you can claim though. Then you don't have to worry about it, HMRC don't care as long as you're on PAYE and paying tax and NI if you qualify as an employee under IR35.

There's lots of scary stuff in blogs etc about IR35 because of two reasons: contractors who hate the government and don't want to pay any tax at all, and accountants who want to blindside you to convince you to pay them a wedge to sort it out for you. It really isn't that complicated.

My best advice is simple. Charge more.


You are a wise wise man

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Green Gecko
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PostRe: The Work Thread
by Green Gecko » Wed Oct 18, 2017 12:47 pm

I was dreading you were about to tell me I am completely wrong. :p

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Tomous
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PostRe: The Work Thread
by Tomous » Wed Oct 18, 2017 1:21 pm

Thanks GG!

Basically I'm on a 3 month fixed contracts and getting paid a day rate into a limited company I set up (rather than use the umbrella company route).

I'm pretty sure I fall under IR35 (99% certain) but I do wonder how likely HRMC are to investigate on such low numbers (<£20k income)...

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Hexx
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PostRe: The Work Thread
by Hexx » Wed Oct 18, 2017 5:06 pm

Question: People at work testing blood/taking insulin shots at their desk.

Am I being a bit of a berk for being annoyed by this?

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Errkal
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PostRe: The Work Thread
by Errkal » Wed Oct 18, 2017 5:19 pm

Yup

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Hexx
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PostRe: The Work Thread
by Hexx » Wed Oct 18, 2017 5:20 pm

Errkal wrote:Yup


Damn. I was worried about that.

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That
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PostRe: The Work Thread
by That » Wed Oct 18, 2017 5:24 pm

You should punish them by putting your needle in them. :nod:

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PostRe: The Work Thread
by That » Wed Oct 18, 2017 5:24 pm

I just can't stop flirting with Hexx. Someone help me.

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PostRe: The Work Thread
by Hexx » Wed Oct 18, 2017 5:26 pm

I ask for advice on an issue that's worrying me, Karl turns up and make sexual provocative suggestions :(

Typical Karl. :x

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PostRe: The Work Thread
by Hexx » Wed Oct 18, 2017 5:27 pm

Karl wrote:I just can't stop flirting with Hexx. Someone help me.


YOU!
Someone help me!
You are not the victim here! You're basically GRCade own WeinStein.

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Green Gecko
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PostRe: The Work Thread
by Green Gecko » Wed Oct 18, 2017 8:35 pm

Tomous wrote:Thanks GG!

Basically I'm on a 3 month fixed contracts and getting paid a day rate into a limited company I set up (rather than use the umbrella company route).

I'm pretty sure I fall under IR35 (99% certain) but I do wonder how likely HRMC are to investigate on such low numbers (<£20k income)...

Don't worry, if HMRC do twig anything, it's usually the client that's held accountable. They get stung for employment malpractice (as potentially a method to avoid paying employer's NI, sick pay etc). But they might collect back taxes in some undesirable way, such as your next PAYE employment regardless of tax code while you've put money aside for your tax return already. Just try to make sure (as difficult as it is) you know what's going on if that happens.

Fwiw I did contracting on a day rate for 1 company alongside my self employment (sole trader not as a company director that you also have to do a self assessment tax return for and pay personal tax liability from that, unless you've set up PAYE yourself with the Ltd) over a year ago and nothing happened. It might be a good idea to do that instead of just taking a director's loan or dividends or whatever, cos then HMRC can see tax coming in in realtime to your national insurance number. They don't care if they get the tax, so there's no better signal. And that way your Ltd company is paying employer NI too (I think... I'm not doing this yet). You don't have to worry about what you can draw in the end.

Services like Crunch Accounting will do this for you but it's not impossible to do it yourself with something like Xero or FreeAgent.

Basically the whole reason for the thing is HMRC want more (ie everyone) paying tax every month, even if they shouldn't have to. Which means massive tax deductions you don't owe on each and every employment, which is why it's gooseberry fool. Then HMRC can hold back massive amounts of pay to until they bother to repay it or you ask them. Same reason why they're introducing quarterly tax returns for the self employed. In my opinion.. Experience. Take the tax and then worry about whether you actually owe it.

Although unrelated, HMRC did royally strawberry float up my tax calculation by insisting I earnt 5k more than I did and so owed 2k in tax on.. strawberry floating nothing. No matter what you do something always seems to get strawberry floated.

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PostRe: The Work Thread
by Tomous » Thu Oct 19, 2017 9:57 am

The employer is just paying a day rate because it's a short term fixed contract. I think responsibility for how I handle that payment is entirely up to me so would be me that got into trouble.

I think I could probably get away with it but at the same time, as a chartered accountant I don't think I should risk it. I'm pretty sure getting caught for tax evasion would be frowned upon by the professional body...

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PostRe: The Work Thread
by Hexx » Thu Oct 19, 2017 9:59 am

Green Gecko wrote:Although unrelated, HMRC did royally strawberry float up my tax calculation by insisting I earnt 5k more than I did and so owed 2k in tax on.. strawberry floating nothing. No matter what you do something always seems to get strawberry floated.


40% tax?

Hi Green Gecko :wub: ;) :wub: ;)

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Green Gecko
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PostRe: The Work Thread
by Green Gecko » Thu Oct 19, 2017 12:34 pm

Tomous wrote:The employer is just paying a day rate because it's a short term fixed contract. I think responsibility for how I handle that payment is entirely up to me so would be me that got into trouble.

I think I could probably get away with it but at the same time, as a chartered accountant I don't think I should risk it. I'm pretty sure getting caught for tax evasion would be frowned upon by the professional body...

As long as you do what you are meant to I don't think you'll get into trouble. Its unlikely HMRC will find out imo. It's them that's potentially avoiding employment status which skirts around basic things like working time regulations and minimum wage including benefits like statutory holiday and sick pay that they won't pay you (you'd be expected to pay yourself this) as well as employer NI (which is a lot when you add it up, does anyone look at it? That's where your NHS comes from..). It's that which would be frowned upon and as long as you fulfill your tax obligations it's not your problem. If you are caught within ir35 then do what you need to do.

If you advertise yourself as an accountant and are set up as a business it's fine, it does sound like they just don't want to pay tax to employ you though. Short term PAYE employments and casual contracts like this are not uncommon, I did a few days every month and I was still on the books elsewhere. I reckon it also depends how the arrangement came about. If they approached you not as a business but as an individual and then said, ok but we're not employing you, that's odd. If you applied for a 3 month contract that didn't say anything about being a "contractor" or "freelancer" then that isn't right either. They should use something like a temp agency that does that for them if they don't want employment overheads.

In terms of evidence gathering all HMRC can really do is look at your personal tax record and see whether you were only working for them during this period, and had no other business through this company, and it existed solely for the purpose of doing this job.. They might not like that. But they would go to the client and say, "why didn't you employ this person. It falls under IR35"? And that's just their mechanism for catching out "employment evasion" so to speak.

Some people say it's also to kill off the "gig economy" but personally I think that's scaremongering. It's fine doing business as a Ltd company contractor as it always was. Just don't work for one outfit all the time.

If all tax was paid, there's no repercussions for you.

Just do your things, I imagine you know how a Ltd company works betier than me!

It probably would be easier to use an umbrella company (again government doesn't like them but if tax and everything else is paid who cares) but as an accountant setting up PAYE shouldn't be too hard using something like Xero (which includes payroll processing) so you are giving HMRC all the info and tax they want when they like it (most often). I find if you are an honest citizen HMRC are pretty reasonable people, it's the systems that cock up.

If you do fall within ir35, your company must pay NICs, which can be done in a variety of ways (best via PAYE).

The nice thing about doing that is when you've completed the contract you'll be able to continue operating as company and take on other work all over the place for a fair wedge more than those employed by their "client". It's not for everyone though.

If it's too much hassle, use an umbrella company. Most of the advertise as being "ir35 compliant". Whether that's true or not, I cannot say. I used Exchequer Solutions. They were a bit excel spreadsheety, but I got paid ever Friday and HMRC never got mad.

You could even just leave the Ltd company dormant and do this all on your self assessment as a sole trader, do some other random guff like a tax return in the new year as a freelance accountant, you can net a few £100 or so just for filing that for some busy/lazy person. That's a lot less paperwork and obligations to companies house, HMRC corporation tax AND yearly self assessment for you. Those machinations can grate a bit if it's not worth your time. But I think it's pretty easy these days. Just mark a few giant red deadlines on your calendar and sign up for all the email alerts.

Edit: if you do use the Ltd company this should help a lot https://www.gov.uk/guidance/ir35-what-t ... it-applies

Determine ir35 status (consider bias from accounting service): https://www.crunch.co.uk/knowledge/ir35-calculator/

HMRC employment status tool: https://www.tax.service.gov.uk/check-em ... -tax/setup

If you use the above and are able to stick with your statements and provide evidence if HMRC investigate the arrangement, you can actually use it as evidence you were complying with the legalisation to the best of your knowledge. Worth doing. It also tells you how you need to handle the tax afterward.

I also find it helps to google similar scenarios because there are a lot of accounting Q&A forums out there.

But like I said, if you are unsure, just charge more money to cover your potential tax obligations. Worst case scenario is you get a massive tax refund at the end of the financial year (cost me hundreds, but hey ho, I had less to worry about) ;)

"It should be common sense to just accept the message Nintendo are sending out through their actions."
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Kezzer
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PostRe: The Work Thread
by Kezzer » Thu Oct 19, 2017 2:10 pm

Well. I have the go date for my transfer down south.

Got to find somewhere to live before the 6th November. :dread:

This post is exempt from the No Context Thread.

Tomous wrote:Tell him to take his fake reality out of your virtual reality and strawberry float off


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PostRe: The Work Thread
by Qikz » Fri Oct 20, 2017 7:12 am

Kezzer wrote:Well. I have the go date for my transfer down south.

Got to find somewhere to live before the 6th November. :dread:


How south?

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PostRe: The Work Thread
by Moggy » Fri Oct 20, 2017 7:47 am

Qikz wrote:
Kezzer wrote:Well. I have the go date for my transfer down south.

Got to find somewhere to live before the 6th November. :dread:


How south?


Port Lockroy.


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