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Ir 35

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  • unforeseen
    unforeseen Posts: 7,382 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    From experience of getting caught in the public service ir35 trap halfway through a contract, it's easier to go umbrella for that contract and make your company dormant for that period

    Public service Ir35 gets messy with a ltd company because they deduct the tax and not you and since they don't have your tax details they are using BR for the tax code resulting in a large overpayment of tax.
  • MataNui
    MataNui Posts: 1,075 Forumite
    Given that HMRC always look for the low hanging fruit i would suggest you would be safer long term politely declining the contract renewal and looking else where. Its highly likely that if they have not already started doing so they will shortly start looking at people in your situation regarding back payments of tax owed. Legally HMRC are allowed to claim retrospective taxes and logically you would find it impossible to prove that you dont owe any. After all you have been claiming for however long (some people will of been for years) that you are not in IR35 and now your employer is stating that you are (and probably always have been).
  • The issue has only just arisen and prior to that, all involved had an email from the HR dept to say they were satisfied that they were within IR35 and, for us, in any event, this is an issue only spanning a few months.
  • uknick
    uknick Posts: 1,768 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Is it breaking any confidentiality to ask which department it is?
  • Yes, it would be....sorry.
  • We are seeing our accountant on Friday and from email contact he seems to be saying that PAYE is the way to go.

    However, the tax which has been taken at source since the contract went within IR35 is horrendous! Actively looking to find another contract which is outside but being new to this need pointers as to the best websites for such ads.

    Also, I need to come up with a list of questions to ask on Friday to decide which way forward for this contract. PAYE, Umbrella or via my Ltd company.

    Can anyone add anything to the ones about, please?
  • unforeseen
    unforeseen Posts: 7,382 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Well, I think the chancellor's announcement about extending the public sector IR35 model to the private sector is sounding the death knell for single person Ltd companies especially since the tool they use to decide (CEST) is broke and does not take into account the latest case law. It is not fit for purpose
  • unforeseen wrote: »
    Well, I think the chancellor's announcement about extending the public sector IR35 model to the private sector is sounding the death knell for single person Ltd companies especially since the tool they use to decide (CEST) is broke and does not take into account the latest case law. It is not fit for purpose

    When was this? In the 29/10 budget or prior to that?
  • Pennywise
    Pennywise Posts: 13,468 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    unforeseen wrote: »
    Well, I think the chancellor's announcement about extending the public sector IR35 model to the private sector is sounding the death knell for single person Ltd companies especially since the tool they use to decide (CEST) is broke and does not take into account the latest case law. It is not fit for purpose

    Not really. It's up to the client/engager to evaluate whether IR35 applies or not. In a lot of cases it won't apply. Also, the new rules don't apply if the client/engager is a small firm. It's up to the big "employers" to do a proper evaluation and change their contracts/working practices so that they're outside IR35. Otherwise they'll find fewer contractors willing to work for them or will have to increase their rates. This is what happened with the public sector - at first, they just lazily deemed all contractors to be caught but then soon had to change their methods once they couldn't keep their contractors and couldn't recruit new ones for the same money.
  • unforeseen
    unforeseen Posts: 7,382 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    When was this? In the 29/10 budget or prior to that?

    In the 29/10 budget to come in to force Apr 2020
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