The Government has announced that all those working in the Public sector using tax avoidance schemes, such working under a Ltd or Umbrella Co to be outlawed, income tax and national insurance to be paid at source. "tax to be paid at source"
http://www.bbc.co.uk/news/uk-politics-16854187
"We are all in this together"?
JoSoPhine:The Government has announced that all those working in the Public sector using tax avoidance schemes, such working under a Ltd or Umbrella Co to be outlawed, income tax and national insurance to be paid at source.
What are you on about? The article says nothing about "all those working in the public sector" - this is just the head of SLC, even in the related articles.
'He that is taught only by himself has a fool for a master' - HST.
Silly gubberment.
They seem to forget thewhilst the companies they do sweet taxation deals with give them huge amounts of bribes donations, they don't vote.
Oh wait. Of course. they don't care.
Silly me.
*calrity post*
I skim read the OP and answered without fully digesting it. I am not working in a tax fiddling manner.
honest guv.
It shouldn't have any more impact than IR35 already has. You are responsible for your own accounting and tax. If you are honestly not a 'hidden employee' there shouldn't be a problem
But this link doesn't refer to Agency Workers.
It refers to appointed civil servants, subject to the civil service regulations and rules being allowed to have their salary paid through a tax avoidence company.
In itself that's a scandal.
Are you able to provide any links or quotes from Danny Alexander to indicate something that matches your OP header 'Agency Workers tax dodge to be ended'?
Or anything to suggest 'The Government has announced that all those working in the Public sector using tax avoidance schemes, such working under a Ltd or Umbrella Co to be outlawed, income tax and national insurance to be paid at source.'
The only reference to 'source' I could find was this paragraph;
'But while Mr Lester's pay will now be taxed "at source", Labour's Margaret Hodge warned the door remained open for future public sector tax avoidance.'
Are you referring to another article you haven't linked-to? When and where did the Government announce 'that all those working in the Public sector using tax avoidance schemes, such working under a Ltd or Umbrella Co to be outlawed, income tax and national insurance to be paid at source'? I cannot find any such text in the BBC article. I can though find this paragraph;
'In light of Mr Lester's case, he had asked the Treasury to review the "appropriateness of allowing public sector appointees to be paid through this mechanism". This though refers to public sector appointees signed-off with a civil service salary of £142,500 or above.
Have you seen any indication that this review will be extended to non-appointed civil servants with salaries less than £142,500 or even Agency Workers?
I'm stuck with this non-legal non sequitur; I can't match the article linked with the assertion made.
Anotther less than clear assertion from 'Jo follow the trolls...'
"BBC Newsnight reported that he was recruited through the specialist recruitment agency Penna plc, and requested the daily fee for his work as a consultant of £900 to be paid without tax or National Insurance contributions (NIC) deducted - which was agreed with HM Revenue and Customs."
IE: He is an Agency Worker using a Ltd or Umbrella Co as a means to avoid tax.
Hope the same applies to Malcom Newsam in Peterborough who is being paid a small fortune:
A super-consultant will be paid £1,045-per-day by Peterborough City Council to rescue its beleaguered children’s services department.
Experienced manager Malcolm Newsam could earn a salary of more than £230,000 over the 12 months that he is expected to stay on as interim director of children’s services at the council ...
The new director, however, would not be employed directly by the council but via his own consultancy firm MCBN Management Consultants, which charges a day-rate of £1,045.
Umbrella company to avoid tax? Check your facts
Lindylo: Umbrella company to avoid tax? Check your facts
Quick factoid (or not) all Agency Social Care Workers should cease working under an Umbrella Co and work through recruitment agencies under a PAYE scheme to make sure that they pay the most income tax and national insurance, as we are all in this together.
Quick summary being tax efficient is tax avoidance. Ethical? Lawful?
But BBC - Democracy Live - 'Alexander: Tax avoidence schemes to be unwound'
But the above link actually has Danny Alexander in the House of Commons actually saying he would launch a review of the tax affairs of top civil servants following the claims about Mr Lester's arrangement, which were revealed by a BBC Newsnight investigation.
And Margaret Hodge in the same report has asked for the review to be extended;
Margaret Hodge, who chairs the Public Accounts Committee, said she welcomed the review, but urged the minister to go further.
She called for a full list of all senior civil servants paid through companies and for a report on HMRC's role in Mr Lester's arrangement.
I still can't find any reference 'Agency Worker tax dodge to be ended'
I can though find plenty of references to a review of the pay arrangement for senior civil servants earning over £142,500.
Have you any link or report to suggest that the remit of the investigation is beyond the bounds determined by Danny Alexander and that some decision has been made?
I note that in the reports, the quoted sum to be paid if Mr. Lester 'goes on the payroll' increases somewhat;
They produced figures which showed that Mr Lester's package of salary, bonus, pension contribution, travel expenses - which include a weekly commute from his home in Buckinghamshire to SLC offices in Glasgow - and agency fees would cost £501,000 over the two years with the existing arrangement.
But if he was moved onto payroll, the total for two years would reach £588,900 because of a finder's fee payable to Penna and tax and National Insurance costs to the SLC.
So it is by no means certain that any move to end these arrangements for some senior civil servants would ever be enacted.
I still can't find anything to suggest 'Agency Worker tax dodge to be ended'
I can though find plenty of reports to indicate 'Agreements with senior civil servants paid over £142,500 through personal service companies to be reviewed'.
Have you any reports or evidence for the Quick factoid?
Has some edict been issued to make this mandatory? I'm presuming that being a factoid there is a link or government declaration on this somwhere, but I can't find one.
And why should Agency Social Care Workers pay the most income tax and national insurance? If they were to work through a PAYE scheme surely they should pay the same rates/percentages of NI and PAYE as everyone else. Is there a proposal to charge Agency Care Workers a special, higher amount of PAYE and NI should they work through a recruitment agency under a PAYE scheme?
Why single-out particular individuals to pay the most income tax and national insurance? Surely that would be unfair.
Agency workers can claim a number of 'perks' not available to fully-employed staff i.e. Home to work mileage; lower rate N.I; subsistence from immediately leaving home / work on purely home-work and vice versa travel. Whilst legal IR35 should apply more purposefully as for many agency workers they are not working for a number of different people but just the 1 Local Authority, for instance, and for quite lengthy periods.
The 'flip side' is, of course, the lack of guaranteed work, limited Holiday Pay and no non-contributory pension.
Fully agree that all agency social care workers working in the Public Sector should be using the PAYE scheme to pay all national insurance and income tax at source.
But why should such workers who transfer to a PAYE structure (without the consequent job protection I note) pay the most income tax and national insurance?
Why should Social Workers be PAYE just because they work within the public sector? Ltd / umbrella companies, self-employed are just different employment status. I'm not sure they could be considered a tax dodge in the same context as the article linked to in the original comments.
@RachelL How is it possible to pay the 'most' income tax and national insurance, what does the term 'most' mean in relation to PAYE?
I am thankful for the likes of Malcom, for whilst he is comanding that kind of rate, there is hope for me to eventually earn that kind of money!
This topic always makes me laugh, the whole "agency workers are avoiding tax" is a load of rubbish, there are many 1000000's self employed trade people, and small companies that all use the same tax law, and pay is through dividends. We are not doing anything illegal. I pay Corporation tax National Insurance (minimum rate) and VAT. Ultimately it a choice, yes as a ltd company the rates are more, however as stated there is no sick pay, pensions, paternity leave, or employer perks to the job.
With my company and service, Local Authorities get excellent practice, and the right outcomes for children and families that I work with, my experience, referrences and CV backs that up, I am expensive on an houry rate but in comparison to the sick record of my perm counterparts I am probably better value!
Eh?
But shouldn't you answer that?
After all you wrote;
What did you mean by '...to make sure that they pay the most income tax and national insurance'?
Does it matter ? I'm an agency worker but have always paid full tax and both NI contrbutions - can provide pay slips if necessary. My question is why LAs would wish to have permanent staff Sick pay/ NI contributions/holiday pay/admin sorting out their payslips/Occupational Health/pay whilst suspended/pension contributions. Long ago i was told by a senior admin worker that permanent workers cost over twice their net pay.
Other than a three month date following resignation I dont know why LAs want permanent staff
You could go through an agency to take a local authority post....( lots of enhanced package severed directors did it) and have a relationship with the agencywhere you bill the agency and they pay your check to your bank account abroad where you bought an apartent woith your lump sum.
So if you were put inas interim director/CEO to sort out a "failing " council or department while they restructure and take their time recruiting, you could salt away a years directors salary without paying tax at source.
There is no reason why an independent social worker couldn't come to this same arrangement with an agency. It is unlikely that a council would pay a "sole trader" Social Worker directly with a cheque to an account offshore because the auditors would scream, but the agency is on-shore, so the auditors are happy.
So I reluctantly admit Jo is right...and his assertion is an accurate deduction from the story. I think more of it has gone on in LAs than is generally known.
Im sorry but if LAs had been more astute and rewarding n terms of keeping experienced staff as well as encouragng NQSWs many people might have stayed on