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-appliesDetermine 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/setupIf 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)