| IR35 [message #377749] |
Di, 04 April 2006 21:01 |
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As temporary contract worker I've been using a management company to process
payments due to me, from whichever agency.
However, the management company recently sent me forms to sign and whereby
I'd become the director of my own Ltd company, rather than remain the
employee of an umbrella company. They explained that the service I'd
previously been using was discontinued and this was the new one to replace
it.
Being clueless about tax efficient payroll management, other than I couldn't
seek very much employment without using it, I request any comments from
other readers better informed.
It seems a very radical change of my employment status that I'm agreeing to.
I've no problem with the professional standard of the management company
but am concerned if there are any questions I should be asking them about
this proposal.
JB
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| Re: IR35 [message #377750 ] |
Di, 04 April 2006 22:07 |
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On Tue, 4 Apr 2006 20:01:31 +0100, "John Burke" <dacre80 [at] yahoo.co.uk>
wrote:
>As temporary contract worker I've been using a management company to process
>payments due to me, from whichever agency.
>
>However, the management company recently sent me forms to sign and whereby
>I'd become the director of my own Ltd company, rather than remain the
>employee of an umbrella company. They explained that the service I'd
>previously been using was discontinued and this was the new one to replace
>it.
>
>Being clueless about tax efficient payroll management, other than I couldn't
>seek very much employment without using it, I request any comments from
>other readers better informed.
>
>It seems a very radical change of my employment status that I'm agreeing to.
>I've no problem with the professional standard of the management company
>but am concerned if there are any questions I should be asking them about
>this proposal.
>
>JB
>
What's their new fees?
--
Peter Saxton from London
peter [at] petersaxton.co.uk
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| Re: IR35 [message #377757 ] |
Mi, 05 April 2006 00:04 |
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Peter Saxton wrote:
> On Tue, 4 Apr 2006 20:01:31 +0100, "John Burke" <dacre80 [at] yahoo.co.uk>
> wrote:
>
>> As temporary contract worker I've been using a management company to
>> process payments due to me, from whichever agency.
>>
>> However, the management company recently sent me forms to sign and
>> whereby I'd become the director of my own Ltd company, rather than
>> remain the employee of an umbrella company. They explained that the
>> service I'd previously been using was discontinued and this was the
>> new one to replace it.
>>
>> Being clueless about tax efficient payroll management, other than I
>> couldn't seek very much employment without using it, I request any
>> comments from other readers better informed.
>>
>> It seems a very radical change of my employment status that I'm
>> agreeing to. I've no problem with the professional standard of the
>> management company but am concerned if there are any questions I
>> should be asking them about this proposal.
> What's their new fees?
I didn't do the arithmetic yet.
My first concern here is for whatever change in personal liability I may be
agreeing to.
Their charges (on anecdotal comparison) seem to be reasonable, I
don't anticipate a price hike.
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| Re: IR35 [message #377767 ] |
Mi, 05 April 2006 08:39 |
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On Tue, 4 Apr 2006 23:04:28 +0100, "John Burke" <dacre80 [at] yahoo.co.uk>
wrote:
>Peter Saxton wrote:
>> On Tue, 4 Apr 2006 20:01:31 +0100, "John Burke" <dacre80 [at] yahoo.co.uk>
>> wrote:
>>
>>> As temporary contract worker I've been using a management company to
>>> process payments due to me, from whichever agency.
>>>
>>> However, the management company recently sent me forms to sign and
>>> whereby I'd become the director of my own Ltd company, rather than
>>> remain the employee of an umbrella company. They explained that the
>>> service I'd previously been using was discontinued and this was the
>>> new one to replace it.
>>>
>>> Being clueless about tax efficient payroll management, other than I
>>> couldn't seek very much employment without using it, I request any
>>> comments from other readers better informed.
>>>
>>> It seems a very radical change of my employment status that I'm
>>> agreeing to. I've no problem with the professional standard of the
>>> management company but am concerned if there are any questions I
>>> should be asking them about this proposal.
>
>> What's their new fees?
>
>I didn't do the arithmetic yet.
>
>My first concern here is for whatever change in personal liability I may be
>agreeing to.
>
>Their charges (on anecdotal comparison) seem to be reasonable, I
>don't anticipate a price hike.
>
Best to ask them.
--
Peter Saxton from London
peter [at] petersaxton.co.uk
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| Re: IR35 [message #377778 ] |
Mi, 05 April 2006 15:04 |
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Are you an employee or self-employed?
You state that you're an employee of the umbrella, which would imply
that you're within IR35, in which case you can still be within IR35 in
a Ltd and they can process the Ltd's payroll in the normal manner (i.e.
PAYE).
There won't be any change in status or in your tax liabilities, Gordon
likes contractors to be on PAYE.
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| Re: IR35 [message #377793 ] |
Mi, 05 April 2006 20:17 |
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shano wrote:
> Are you an employee or self-employed?
For tax purposes I was an employee of the management company, self employed
isn't an option for me.
> You state that you're an employee of the umbrella, which would imply
> that you're within IR35, in which case you can still be within IR35 in
> a Ltd and they can process the Ltd's payroll in the normal manner
> (i.e. PAYE).
> There won't be any change in status or in your tax liabilities, Gordon
> likes contractors to be on PAYE.
Thanks, but I'm not so much concerned with the tax efficiency but simply
with any broader liabilities/resposibilities of becoming a company director
for that purpose.
JB
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| Re: IR35 [message #377798 ] |
Mi, 05 April 2006 21:54 |
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"John Burke" <dacre80 [at] yahoo.co.uk> wrote in message
news:49ifvgFoi9r0U1 [at] individual.net...
> shano wrote:
>> Are you an employee or self-employed?
>
> For tax purposes I was an employee of the management company, self
> employed
> isn't an option for me.
>
>> You state that you're an employee of the umbrella, which would imply
>> that you're within IR35, in which case you can still be within IR35 in
>> a Ltd and they can process the Ltd's payroll in the normal manner
>> (i.e. PAYE).
>> There won't be any change in status or in your tax liabilities, Gordon
>> likes contractors to be on PAYE.
>
> Thanks, but I'm not so much concerned with the tax efficiency but simply
> with any broader liabilities/resposibilities of becoming a company
> director
> for that purpose.
1) The reason the management company are doing this is
likely to be because with the current structure, technically
you are their employe and they have realised that as such
they are liable to pay you: holiday pay, sick pay, maternity
pay, renundancy pay etc etc and by moving you to a Ltd
Co director this liability falls to you.
2) This type of composite structure is the one which Gordo
announced in the budget that he didn't like and is looking to
take action to close.
3) In light of the failure of the Muscat appeal (that I read
today) this change, instigated as it is by the management
company is possibly going to be ineffective for the purpose
of (1).
Methink that these PAYE management companies
really do need to consider their business model.
HTH
tim
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| Re: IR35 [message #377803 ] |
Mi, 05 April 2006 23:24 |
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tim (back in SY) wrote:
> "John Burke" <dacre80 [at] yahoo.co.uk> wrote in message
> news:49ifvgFoi9r0U1 [at] individual.net...
>> shano wrote:
>>> Are you an employee or self-employed?
>>
>> For tax purposes I was an employee of the management company, self
>> employed isn't an option for me.
>>
>>> You state that you're an employee of the umbrella, which would imply
>>> that you're within IR35, in which case you can still be within IR35
>>> in a Ltd and they can process the Ltd's payroll in the normal manner
>>> (i.e. PAYE).
>>> There won't be any change in status or in your tax liabilities,
>>> Gordon likes contractors to be on PAYE.
>>
>> Thanks, but I'm not so much concerned with the tax efficiency but
>> simply with any broader liabilities/resposibilities of becoming a
>> company director for that purpose.
>
> 1) The reason the management company are doing this is
> likely to be because with the current structure, technically
> you are their employe and they have realised that as such
> they are liable to pay you: holiday pay, sick pay, maternity
> pay, renundancy pay etc etc and by moving you to a Ltd
> Co director this liability falls to you.
This doesn't sound very promising.
> 2) This type of composite structure is the one which Gordo
> announced in the budget that he didn't like and is looking to
> take action to close.
> 3) In light of the failure of the Muscat appeal (that I read
> today) this change, instigated as it is by the management
> company is possibly going to be ineffective for the purpose
> of (1).
>
> Methink that these PAYE management companies
> really do need to consider their business model.
>
> HTH
Thanks. Figure I'll phone the management company tomorrow.
JB
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