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About littleteapot

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  1. If you were working via a limited company outside IR35 before the new rules came into effect, please take the time to complete the IPSE/CIPD survey to measure the effects of the new rules, whether or not your way of working has been affected. Many thanks
  2. Hi Docgarden There is advice on the contractoruk forums - it's mostly IT contractors, but others are welcomed too.
  3. Article in the Times today
  4. None - if you can go PAYE through the agency, then that's probably a better option than an umbrella.
  5. +1 to this. The only difference in take home with legitimate umbrellas should be the umbrella fees. Any offering 85%+ take home are going to land you with a lot of sleepless nights. People signing up for these schemes, all of whom were convinced by slick salesmen that the schemes were '100% compliant', 'QC Approved', 'HMRC compatible' etc are facing bills of hundreds of thousands. If you're using an umbrella, use a standard reputable company. More information at 'All Umbrellas are Equal'. In terms of fairness, trade bodies such as IPSE have been making this point clearly, and will be backing members whose client have deemed them to be inside and want to claim employment rights.
  6. Interesting letter to NHS provider CEOs "HMRC will treat all public sector ‘self-employed’ contractors using a PSC as falling under IR35 and therefore treated for tax purposes as an employee" is downright wrong - the client needs to make a determination.
  7. Employment status for tax purposes is determined separately to employment status for employment rights purposes. However, especially in light of recent cases, you would have a very good case for claiming workers' rights if your client has said that they consider you to be IR35 caught. I know that IPSE are keen to support their members who want to pursue such cases, as would the unions. However, if you're working via an umbrella, you become their 'employee' and those benefits are paid for out of your rate. There is a danger that many clients or agents will insist that you work via an umbrella to pass on that responsibility. Just yesterday Unite called for umbrellas to be outlawed as it allows employers to offload their responsibilities. The lines between employed and self-employed are becoming increasingly blurred, and we're stuck with a 19th century tax system for a 21st century economy. It's going to be an interesting few years!
  8. Yes, exactly. With an umbrella you already take all the income as salary, so the new rules will not apply.
  9. Hi Jat Your article says that the rules will apply to umbrella users. Most locums using a standard umbrella structure will not be in scope. See "Where an umbrella company employs the worker directly and not through an intermediary, the new off-payroll rules do not apply. Some umbrella companies do not employ the worker directly and so this should be checked. If this is not the case then the normal rules apply. "
  10. Under the new rules, it will be for the client to determine your IR35 status. HMRC will be providing a tool, but it is not available yet. Note that this applies to all payments made after 7 April, so work done in March will likely be subject to the rules. There is also a risk that, if you're currently operating outside IR35, and you move to be inside in the same role, that this will raise your risk of a retrospective investigation. So if you don't already have tax investigation insurance, you really should consider getting it. Being inside IR35 means you will have to take all the income as deemed salary - NI and PAYE will be deducted by the payer. You will not be able to claim travel and subsistence expenses. The difference to your pocket depends on your current set up and really is individual. There's a good, free guide on IPSE's site - I don't know if links are allowed, but if you google "ipse ir35 guide public sector" you should see it at the top of the results.
  11. If you are considering a limited company, make sure you're aware of the public sector IR35 changes that are being introduced in April - the end client has to determine IR35 status. The whole thing is a real mess - the "tool" HMRC are producing isn't ready yet, and, as the new rules apply to payments from April people need to evaluate their position now. There's lots of clear guides available - google "guide ir35 public sector" (not sure if links are allowed - happy to point you at some good resources if they are) If you're going to be IR35 caught, then an umbrella is the easiest option. If you do decide to go ltd, you don't need a local accountant - you need a specialist that understands the way you are working. Again, google is your friend.
  12. The Autumn statement confirmed that the way that IR35 applies in the public sector is changing. IR35 affects those working through a Ltd Company, and is intended to identify those who, if the company were absent, would be "employees" of the client. If you are IR35 "caught", you need to treat 95% of your company's income as if it was salary, and pay employers NI, employees NI and income tax on the full amount. Travel and subsistence expenses are not allowed if IR35 caught. Up until now, it has been down to the locum to decide whether IR35 applies, but this is changing from April '17, when the end client will need to determine whether IR35 should apply, and the next party in the chain (often an agency) will deduct the taxes before passing the net amount to your company. The 5% allowance is being removed. There is a lot of information out there, so if you think these changes could affect you, it's essential that you read up and understand what is changing.
  13. If you are operating outside IR35, then a limited company with optimal salary/dividends mix is going to be the most tax efficient way of paying yourself. Going PAYE, either through an agency payroll, or via an umbrella company, will mean that both Employer and Employee NI are deducted - it's not the agency taking your money, it is employment taxes that have to be covered from your rate. Also worth bearing in mind is the removal of travel and subsistence expenses for umbrella users, or IR35 caught limited companies from last April. And the current proposal for public sector clients to determine your IR35 status and deduct taxes at source that is likely to come into effect next April. There are plenty of companies and membership organisations offering tax investigation insurance if you're worried about IR35.