Member Since: 2nd Aug 2012
10th Aug 2018
I think, as accountants, we are used to dealing with change - virtually none of it makes our lives easier - at least not at first. So I'll start planning for it when I know what it looks like. With MTD and the private sector IR35 roll-out coming up, we already have enough on our plates to worry about.
Churchill said 'keep buggering on'. What else can one do?
30th Nov 2017
How will the average end-client know the new rules? If (say) an architect's firm hire a freelancer limited company directly, then they will probably just pay on invoice as with any other supplier. It's one thing for Public Sector bodies to know the rules, but the average private sector business will never have heard of IR35.
And if such directly contracted companies are let off, and only freelancers going through Agencies are affected, then maybe Agencies will just charge a finder's fee to the end-client and let the freelancer be paid directly by the end-client.
I guess this will all come out in the consultation, but I think the private sector won't take this lying down.
Also, we all know HMRC has limited resources. It will only take a few Agencies to take a chance with the law, in an effort to attract the best contracts and freelancers, and the others will feel obliged to follow or to see their businesses fail. Every accountant is familiar with the client who says "my mate gets away with it so why can't I?".
13th Mar 2017
I think a lot of of us could see some point in RTI. Many businesses used their PAYE liability as an interest-free overdraft which only had to be cleared every April. RTI made this much more difficult because HMRC can now compare the PAYE due with the PAYE paid.
But I agree with your other points. If there is no tax to be paid quarterly, what is gained by quarterly reporting? I literally cannot see the point.
And can someone explain why MTD will bring in more tax? What errors (to HMRC's disadvantage) are we/our clients missing that will now be spotted in a quarterly report? Organised clients get it right anyway. Clients with time pressures are still going to give duff information in a rush.
It only seems to make sense if it gets linked to paying income tax/CT quarterly.
13th Mar 2017
Good question, Adam. You inspired me to check the figures - and I got stuck on the first line - £20,000 income in 2016/17.
I'm getting about £2,628 for the Company (using £8,060 as the salary) and £2,874.60 for the sole trader. Can anyone help?
13th Mar 2017
You are right - Rebecca's wording is wrong. But I think her calculations are right.
11th Jan 2017
Talking of practical aspects and confusion (mine)....from what I've read, if a Freelancer with a PSC is caught by this new rule, and invoices/earns £60k, they'll end up with a deemed salary of about £60k (gross) paid by the Public body or Agency - and a P60 issued by the Public body/Agency showing £60k salary to put on their Self Assessment Tax Return.
Then, the guidance seems to say the PSC gets a deduction of the PAYE/E'ees NI already paid by the Public body/Agency when working out what PAYE/NI is due to HMRC through RTI. So this implies a payroll is being run by the PSC - presumably leading to another P60 of (say) nearly £60k?
Obviously one can't put two P60's showing pay of £60k on a Self Assessment Tax Return - when the PSC only invoiced for £60k, so I'm missing something.
Does/can the freelancer just take the net deemed salary amount from their PSC as net salary without the need for their PSC to actually run a payroll?
But then what would show in the PSC's accounts as a cost? Is it the deemed salary calculated by the Public body/Agency? Or don't we know yet?