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

date posted 30th October 2007 21:38

I might be one of those IR people you hear about and watching you ! Best to
heed the advice...take it or leave it...

We can all be victims - IR, being a government organisation has infinite
resources (funded by the people they are chasing) and will get their money,
the temp/freelancer/contractor is not...

----- Original Message -----
From: "Dominic Raywood" [EMAIL REMOVED]
To: [EMAIL REMOVED]
Sent: Tuesday, October 30, 2007 10:14 PM
Subject: Re: FN-FORUM: Ir35 legislation & opting out ?

>
> Bit unnecessary isn't it Dawn? Unless I missed something, he was only
> asking for advice - which is what the forum is about no?
>
> Let's be nice to each other and let the IR be the nasty ones :)
>
> Dawn Thomson wrote:
>> Accountants ensure your employment status is clear and handle all of your
>> tax issues - whether corporation, self-assessment, annual accounts, VAT,
>> expense claims etc. and can act on your behalf with IR.
>> Investigations can occur, especially where your employment status is
>> suspect, and you are trying to diddle IR & HMRCE out of their money.
>>
>> If you want to check your contract for IR35 compliance, pass it onto an
>> employment or contract lawyer and stop asking people on forums !
>>
>> ----- Original Message -----
>> From: "Mike A" [EMAIL REMOVED]
>> To: [EMAIL REMOVED]
>> Sent: Tuesday, October 30, 2007 9:18 PM
>> Subject: Re: FN-FORUM: Ir35 legislation & opting out ?
>>
>>
>>> 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 Ł60 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 Ł200+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 Ł1020 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 Ł1000 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
>>>>
>>>>
>>> --
>>> 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
>
> --
> 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
>
>