Re: FN-FORUM: Ir35 legislation & opting out ?

date posted 30th October 2007 20:49

I thank you - just don't rely on me to do any sums for you :)

Well, I ran out of digits to count when I reached 21 ;)

Mike A wrote:
> Dominic's feedback is well worth taking as the safe course.
>
> As for those that are in disagreement with my feedback: all I can say is
> I've handled many tax tribunals for clients - it's all about the evidence.
> If the evidence is that a person sought and acted upon advice from the
> Revenue it is hugely unlikely the tribunal will go against them, especially
> if supported by a lack of intention to defeat the tax system. If that is the
> end result it is also the basis of advice at the beginning. Dominic's
> suggestion of acting via an accountant comes with the protection of
> credibility and professional indemnity.
>
> Mike A.
>
>
>
> ----- Original Message -----
> From: "Dominic Raywood" [EMAIL REMOVED]
> To: [EMAIL REMOVED]
> Sent: Tuesday, October 30, 2007 8:59 PM
> Subject: Re: FN-FORUM: Ir35 legislation & opting out ?
>
>
>> Well guys; I may be able to offer some first hand experience here. I have
>> a ltd company and mainly work with large companies either contracting
>> direct, or via an agency (spit).
>>
>> I don;t know how much you spend running your company currently; but I pay
>> an accountant £60 a month + vat and they do everything for me - payroll,
>> vat returns, PAYE, annual returns, one personal tax return etc. I also
>> made the rather excellent decision to join the Professional Contractors
>> Group. I joined them when they started up and have not looked back. I
>> pay them £200+vat per year.
>>
>> I recently had an IR35 investigation. The PCG dealt totally with the
>> Inland Revenue; I didn't have to write, read or speak to them! All
>> correspondence went directly between them. It ALL stemmed on contracts
>> and nothing else - nothing! By ensuring I have IR35 friendly contracts,
>> whether working via an agency, or direct; they all passed IR35. They gave
>> me a clean bill of health after a very short investigation - which I
>> believe is quite rare. All I have now to haggle about is expenses etc.
>> The other big factor helping me I feel, was the minimal Web Design work I
>> get - effectively meaning I have continuous multiple customers/clients. I
>> also advertise by way of the website, Yellow Pages ads over the years etc.
>> Basically, good contracts and avoiding ANY pointers to hidden employment
>> e.g. turn down any free gym memberships, free parties. Try to use a
>> personal email if they will let you. Don't fill in any holiday request
>> forms - just tell them when you will be taking time off. Every client I
>> have worked for understands about IR35 and they are all happy to help to a
>> degree.
>>
>> I don't know how much you currently spend running your business, but my
>> 1020+vat a year is it. I have had free banking since I started in 1996 -
>> not one charge.
>>
>> Think of the costs as insurance. You'll probably be earning around 100k
>> if you are contracting. 1% (tax deductible) is a small price. If you
>> also register for VAT, that will return some of that £1020 anyway. I use
>> the fixed price VAT scheme, where I charge 17.5%, but pay something like
>> 13.5%? Basically, I can't claim VAT back when I spend, but I retain the
>> 4% (or there abouts) on every invoice I raise. My accountant reckons I
>> saved well over £1000 last year doing this - which has offset the "costs"
>> of running my business. Add to that the ability to take a low salary and
>> use dividends and the Employer's NI isn;t a big issue either.
>>
>> Most accountants will get you an off the shelf company for nothing in
>> 24hrs.
>>
>> You will definitely pay more tax through an umbrella company - I guarantee
>> it!
>>
>> In summary: If the work is lucrative enough, then the costs will be far
>> out-weighed by the earnings. Join the PCG and make sure you use a
>> contract recommended by them. Leave the contract discussions until after
>> you have the contract offer. Then, hold out if the agency gets funny; I
>> have found they will ALL move on contracts if they see their 10%-20%
>> disappearing!
>>
>> Yes, running a company is a little hassle, but I don;t think a limited
>> comany need be that onerous to be honest; especially if your accountant
>> does 95% of the work for you, like mine does.
>>
>> If you have any specific questions: bank, accountant etc. feel free to
>> contact me directly.
>>
>> :)
>>
>> Alain Williams wrote:
>>> On Tue, Oct 30, 2007 at 06:46:29PM -0000, Phillip Healey wrote:
>>>> I can't see how this is at all true. If it were, then it would
>>>> effectively
>>>> rule out any self-employed person from ever doing any work. With
>>>> actually
>>>> knowing 100% the facts, I would suggest that this is nothing more than
>>>> paranoid nonsense from the company you are working with. They obviously
>>>> think that pushing you into using an umbrella company will rid them of
>>>> any
>>>> risks they?ve dreamt up regarding taxation etc.
>>> If you do a runner and don't pay your tax then the agency could
>>> be liable to pay your tax. If they contract a Ltd company
>>> then they don't have the liability. It is a small risk, but
>>> they won't take it. Most contract agencies are like this.
>>>
>>>> Although I could be wrong, which would be very worrying.
>>>>
>>>> Regards
>>>> Phill Healey
>>>> Munklefish
>>>> Po Box 70
>>>> Manchester
>>>> M34 3SQ
>>>> T: 0161 408 4759
>>>> ?
>>>>
>>>> -----Original Message-----
>>>> From: [EMAIL REMOVED] [EMAIL REMOVED] On Behalf Of steve
>>>> wilson
>>>> Sent: 30 October 2007 18:28
>>>> To: FN-FORUM / [EMAIL REMOVED]
>>>> Subject: FN-FORUM: Ir35 legislation & opting out ?
>>>>
>>>>
>>>> Hi guys,
>>>>
>>>> I am currently doing some freelance work via people4business. I am
>>>> having to go through a umbrella company because of new legislation
>>>> regarding any unpaid tax will be the responsiblity of the contract
>>>> agency. So they need to cover themselves by making their sellers go
>>>> through a umbrella company. This way, I basically pay tax as any normal
>>>> 9-5 person would.
>>>>
>>>> The problem for me is, I have to pay admin costs to use the umbrella
>>>> company, and also I would like to pay my tax at the end of the year like
>>>> any normal freelancer.
>>>>
>>>> Does anyone know anything of this legislation and if there is a way
>>>> around it ? Is the agency im using giving me the correct information ?
>>>>
>>>> I am told, the only way to get around this is to become a ltd company.
>>>> But my earnings do not warrant this at the moment..it is a lot of
>>>> paperwork and quite expensive.
>>>>
>>>> Also, is the opting out clause in people4business relating to this ir35
>>>> legislation ?
>>>>
>>>> Any help or info is really appreciated.
>>>>
>>>
>> --
>> Dominic Raywood
>> Rubicon Computer Services Limited
>> W: http://rubiconcsl.com
>> E: [EMAIL REMOVED]
>> T: 08456 521 561 (+44 1823 698420)
>> F: 08456 521 561
>> M: 07050 204998 (+44 7811 252573)
>> Skype: RubiconCSL
>>
>> --
>> Freelancers, contractors earn more with Prosperity4
>> Call 0870 870 4414 or visit www.prosperity4.com
>> and benefit from Inland Revenue approved expenses today.
>>
>> To advertise here: http://www.freelancers.net/advertising.html
>>
>>

--
Dominic Raywood
Rubicon Computer Services Limited
W: http://rubiconcsl.com
E: [EMAIL REMOVED]
T: 08456 521 561 (+44 1823 698420)
F: 08456 521 561
M: 07050 204998 (+44 7811 252573)
Skype: RubiconCSL