Name: Tax expert tells Nigel Farage how the controversial new IR35 tax rules will affect you? | LBC
Uploaded: 2020-03-13T06:52:47.000Z
Duration: 41 min 32 s
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So when is somebody a genuinely self employed contractor offering out his or her service is, or whether they really employees of a company and on a very sort of high profile level?

Basic quantifiers

We've seen some broadcasters over the course of the last couple of years who really fallen foul of this, the most recent one being TV presenter Ayman Homes, who work for ITV on he's lost a case against H M Revenue and Customs because they say, Really, he was an employee of ITV and that he was using a vehicle, a company vehicle as a way, you know, perhaps not paying as much tax as he would if it was fully on P A y E.

The comparative

But it's not just relatively Heidi paid broadcasters this effects, I mean, for example, one of the things that really first put me onto this was a lesser of a sort of really quite upset letter I got from someone saying 15 years ago, Nigel, I started my own niche company.

Providing I t on Project Control service is I worked over the years for 25 different companies.

I voted conservative in the election because I thought they were the party off business, he says.

My current client now refuses to work with limited companies.

They have put a blanket ban on them and indeed other firms that I do work with.

So he's There's a small guy running his own business doing work for big companies.

And he says the other big firms are also saying the same.

So it's now impossible for me to get work via my company, and he goes on to make the point.

Good night, buddy, that he doesn't get health provision, doesn't get pensions, doesn't get any protection of any kind at all.

He's running his own business, and he's incurring costs in running that business.

And if the firm's iWork for now, say they're not gonna cooperate for him on that basis, he's got a problem.

And I think from what I can pick up on this and other tax issues, they're awesome.

Let's try to understand exactly what is going on.

I'm joined this morning by Mark Levin High street accounts and instituted taxation.

So at the moment it is my responsibility.

If I'm the person with a limited company and I'm providing, you know, I could be an electrician's, I could be providing I t service is, you know, and I designate, I designate that I'm that I'm providing that service and you, as the company pay me the amount plus B 80 if I'm V 80 registered.

But all the rules about a change are there in a couple of weeks, dramatically So it's actually vice a versa.

The responsibility is now on the top of the pyramid.

It doesn't matter how many people were in that pyramid.

You might have an umbrella organization employing lots of subcontractors will come on, I'm sure will come under the umbrella cos a bit later on.

But the whole idea was that you then turned around and said, If you wanted your money, you then went to probably human resources of the big employer, the big employer.

Let's talk about being the main people at the top there, that the giants of the World Bank's building societies, big buildings and people like that would put BBC on one side because that's a separate issue on.

They now have the responsibility of ascertaining who were paying this money, too.

Is it a limited company are reliable for national insurance?

And here is where the bomb is going to be bitten because from the six of April, national insurance will bite in and Persia and tax will be deducted if the main employer decides that they're glorified employees.

Now, no matter how many steps that you take and you can take steps, you could actually try and ascertain your own tax status by a tall initial letters.

Which stands for check employment status tax.

It's a bit floored on its being around for some time with us on The Web revenue website was updated in about November, but there are flaws in it that can be challenged.

So what you need to do if you're the person that got your own one man band personal service company, I'll try and avoid initial letters.

But if I am, you know, a one man company or two man company providing I t service is and I go to, you know, a major company and I go to them once, twice a year on I update that computer system.

Whatever I do, you know, I submit a bill.

It's a couple of ground each time or whatever it is, you know, it's then as it is now, my responsibility to sort that out with the tax man.

But if that then becomes the responsibility of the company is it will From the sixth of April, they were just said, You know what?

We don't want years down the line to find out that, actually, that actually were in trouble.

So they're just gonna deduct national insurance and P A Y, and that's gonna leave a lot.

So that's gonna leave a lot of self employed people much worse.

When these rules first put out inside union revenue, about 1/3 of their contract subcontractors quit.

Yep, because they found out they were gonna be caught.

So in sent simple money terms, it's a negotiation between you as the contractor providing the service on the final employer.

A lot of people have estimated you need to put your prices up between 20 and 30% God so that your take home pay is gonna be the same before the fifth of April 2020 as it is going to be afterwards.

Now, if anybody gets it wrong in this chain, talk about a chain.

Let's think about a relay race where you somebody starts it off, passes it on to somebody else.

If you get it wrong and the tax man hasn't got his money, he couldn't go back right to the very top and ask for that money.

So the point that you made about the top man, you don't got to national.

Oh, yeah, you know, why have the liability?

Is there any chance the government could?

Yes, changed their mind in the very much protest last week and the government's announcement that the back end of last week was We're going to have a soft landing, whatever that is.

No hard reaction in the next 12 months, which is another way of kicking into touch.

Yes, you've never noticed these questions.

But it would be fair to say, wouldn't it, Martin, that some people have actually missed used this system?

Because effectively, let's just give the example.

It could be a broadcaster, for argument's sake, somebody but somebody whose whose only source of income has come from one company to whom they provide work and service is on.

Then they do it through a limited company.

Um, and they're able, you know, tax wise to avoid quite a bit of national insurance.

Some people have been abusing this system.

Abusing is if you look at the science in the park that says, Please keep off the grass.

People will always work, walk on the grass.

I get one issue with being inside are 35.

His travel costs and subsistence could no longer be claimed.

It's 12,000 quid a year for parking and train to go months, t go down to London.

That's a huge hit on will demobilize a skilled niche workforce, so she makes the point.

You know, if you're commuting down from rugby everyday to London and you work for several companies, you know, employee of anybody you work for, several companies on you earn money from them.

At the moment, you can offset your travel costs against it.

Absolutely Fairport, and that that's one of the classic ones.

The whole idea of travel costs is being contested over many, many decades with the tax man, and there's a case called The Recorder of Portsmouth.

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Tax expert tells Nigel Farage how the controversial new IR35 tax rules will affect you? | LBC

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