New UK Finance Bill in effect – Self Employed? Watch out!!

[Steve White]

The crux of this is…. The HMRC noose is tightening as far as offshore work goes.

I suggest that, soon enough, UK based companies might not feel comfortable accepting personnel supplied by an overseas agency for work in the UKCS in case they (the UK based company) find themselves deemed liable for the individuals taxes by HMRC.
There may come a time when they will insist that you are an employee of a Ltd Co in all instances. It seems clear to me that HMRC want their cut and see the way forward as doing their best to ensure that those working in the UK are employees of a Ltd company, with both the employee and the employer making contributions to the revenue system. I kind of see their point.

If you are an ex-pat (Especially a UK ex-pat) but expect to continue to work in the UKCS but not pay tax on that income, and still live overseas and not pay tax there either, then you might have to have a rethink on how you might be seen by HMRC. I’m reasonably sure that all companies, be they agency or operator, will soon need to report to HMRC whom they have used throughout the year and where/how many days they worked in the UKCS. That’s if they are not doing it already!
Denmark forces companies to do this. I know that for a fact as I had Danish revenue onto my company in Portugal because one of our employees had worked a trip for a well known Aberdeen based offshore company in the Danish sector. The the Danish tax person was like a terriers on steroids!!

Of course there is nothing wrong with living overseas and working overseas as an individual. How the country you hang out in deals with that can be quite beneficial from a tax aspect 😉 Been there before 🙂

From past experience I know that UK based companies will take the path of least resistance when to comes to dealing with HMRC. If, today, that means only taking on those employed by a Ltd company then that’s what they’ll do.

Initially, there will be a panic style shuffle of contracts of service, coupled with a fair smattering of confusion. For next year we will see that things will have shifted somewhat to compensate for the new legislation. I also assume the playing field will change somewhat on the agency front. A lot will simply vanish. We’ll also start seeing job adverts along the lines of: ‘Must be employee of Ltd co only’!

I feel self employed, as we knew it offshore in the UK, is pretty much dead in the water, as will be any individuals being paid gross for work in the UKCS and skipping out no taxes paid.

Steve.. feel free to correct any of the above!

An excellent summary !

HMRC are simply starting to follow other countries such as Denmark and Norway. I deal with the Norwegian system on a daily basis and their system may be in the dark ages IT-wise but there is a cross-check of employer-employee-client/agency. I can see the UK going the same way.

As has been said, it will be the agencies who will be looking to be sure that they are not ‘on the hook’ and it is already happening.

[James McLauchlan]

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[Andy Shiers]

I don’t find this confusing at all 8)
If this helps the removal of many of the agencies and stems the flow of wannabe pilots with no technical background the better !
This will also tighten up the certificates and more better to control the industry.
As your Header states ………….. It’s to do with UK Self employed and Agencies.
Start another thread about Expats living in foreign countries , as you lot don’t apply to this header.
Less confusing now ? I hope so 😯

[James McLauchlan]

I don’t find this confusing at all 8)
If this helps the removal of many of the agencies and stems the flow of wannabe pilots with no technical background the better !
This will also tighten up the certificates and more better to control the industry.
As your Header states ………….. It’s to do with UK Self employed and Agencies.
Start another thread about Expats living in foreign countries , as you lot don’t apply to this header.
Less confusing now ? I hope so 😯

Good point!

[T-Boy]

I don’t find this confusing at all 8)

Thank gawd…! That’s two of us then! 8)

No ROV schools required. What we need here, is a taxation training school to educate the masses. 😉

The new kids on the block have made their short, sharp buck, we’ll be back to the 4 or 5 major agencies soon I hope.

[Andy Shiers]

YIPEEEEEEEEEEEEEEEEEEEEE ! 😀

[Richard Browne]

Not confusing….then please tell me what an "employee" is in the eyes of the taxman, with regards to SED?
And please don’t say an employee with regards to SED is looked at the same way as a person working for a company full time on a permanent contract, as this is clearly not the case..
Who would have thought that even if you consider yourself self employed as you are paid gross, and jump from job to job, the fact is according to my past accountant is that may not be the case, as you don’t provide your own tools to carry out your job and you don’t pay your own airfares etc…so what does self employed mean in the eyes of the taxman with regards to SED….not confusing…are you serious mate…maybe not for you but for most it is..

[Roy Simson]

Echidna I know how you feel and what I am about to tell you you may not want to hear , Forget SED if you want to work in the UK you can only do this PAYE or limited company .

HMRC want there pound of flesh and they can change the rules as they go in fact this is just the tip of the iceberg of things to come . Even working via a UK based agency on some overseas project you might end up having to go PAYE or Limited company .

The best way is only work via non uk agency’s because the UK based agency will be liable to make suitable deductions lets face it you go to West Africa for 2 months expecting a nice big cheque when you return back home say in Thailand only to be told " Sorry we had to make deductions , Plus dont forget since you dont live in the UK you wont have a tax code so your be given a emergency tax code " But don’t worry you should get some thing back "

UK based agency’s will only tell you what you want to hear but like I said they are the ones that are liable if they don’t make deductions .

I don’t know why every body worried about this as there is mass of work available all over the world .

Raptor

[TEAMJBR]

Not confusing as such just depends on which foot lands in which camp.

If you are a genuine expat with zero ties to the UK and I mean ZERO then this does not concern you you are none resident status and not liable for tax. How and if you work through a UK agency is about if and how you get your gross pay!!

If you live in the uk house kids etc then its hard already to not work without a ltd company or umbrella company and if you’re not working on a qualifying vessel for 183 days you will pay tax and NI full stop.

[James McLauchlan]

…….

If you are a genuine expat with zero ties to the UK and I mean ZERO then this does not concern you you are none resident status and not liable for tax. How and if you work through a UK agency is about if and how you get your gross pay!!…….

Agree! As a UK ex-pat. Stay out of the UK, have no UK ties (rental/owned property, car,cell phone, bank account, pension etc) work overseas for non UK companies, not through a UK agency, and ex-pats will be fine as TeamJBR suggests above.

Working in/through the UK is another matter
I can’t see UK agencies being too comfortable with them using ‘self employed’ ex-pats (brits or otherwise) working offshore in the UKCS and being paid gross, then leaving (tax unpaid) in case HMRC come after them (the agency) for perceived outstanding taxes. In fact, from what I have read, I don’t think agencies can now legally take on self employed people and send them offshore anyway. Pretty sure this came into effect beginning of April 2014.

Whilst I see nothing wrong with the self employed gross pay concept (used that method plenty, and very successfully, as an ex-pat in the past) I sense UK agencies will now err on the side of caution and steer clear of anyone not employed in one form or another, wether it be as an employee of the agency itself, or their appointed umbrella ’employer’, or self owned Ltd company. Mostly this means 1 person Ltd co, but there are exceptions to that as (for example) I operate under a 2 person ltd co.

Note. When operating as a limited co working in the UKCS you are expected to carry employers liability insurance to cover you working offshore.

Technically, when outside the 12 mile limit, we are not working in the UK anyway. In theory there should be no need to be employed yet HMRC now pretty much see it this way:

You can no longer appear to be self employed and work offshore in the UKCS. This is the ‘false self employment’ that HMRC have defined and are clearly trying to stamp out.

I would suggest that HMRC will apply this approach across the board, no matter where the worker resides. In the UK, in the EU or overseas or whatever their tax/residential status may be. In other words.. HMRC can pretty much see it how they want in their patch of the world and take steps to enforce it at a local (UK) level.

One thing to be mindful of. Those ex-pats living outside the UK and currently working the North Sea need to be wary of your regular agency you’ve been using for years suddenly trying to get you on the books…. if you you are an ex-pat and go PAYE and pay NIC in the UK you will no longer be viewed as an ex-pat by HMRC.

Employers National Insurance Contribution. (aka. that paid by the employer to the government)
The other item mentioned earlier up this thread, is a certain agency offering you an employment contract and then suggesting they will have to deduct the employers NIC (roughly 18%) from your agreed rate. As an employee you would already be liable to pay the employees National Insurance contribution which would be deducted at source. There is no way you should be paying the 18% employers contribution as well! You’d be on a huge hit on take home pay! Plus I don’t think an employer can legally deduct the employers contribution from your agreed rate anyway. The name ‘employers contribution‘ is a clue!

To sort this out the agencies likely need to go back to their client and re-negotiate the rate so that they legally pay the employers contribution out of their margin. Deducting the employers National Insurance contribution from the employees agreed rate is not the way forward!
Can’t see many (if any) clients agreeing to that.

A number of agencies must be fretting a good bit over this, as they did not expect it to come into force until April 2015!!

[Andy Shiers]

When operating as a limited co working in the UKCS you are expected to carry employers liability insurance to cover you working offshore

Sorry James . That is actually incorrect.
As a Ltd Company working as a Freelancer it is the responsibility of the owner of the equipment / Subcontractor to carry the Liability insurance.
In the UK , that would be the ROV Operating company. The Agency will also cover a Liability Insurance with Personnel operating through them ( IF the Agency does not provide this – Regardless of whether you are a one man ltd outfit or on their payroll …………….. STEER THE F#*k away from them ’cause you will have no leg to stand on in a court of law ! )
The Liability Insurance certificate ( Or copy , In date ) has to be provided at EVERY WORKSITE. This certificate covers all employees whether Hired . Salary or person acting on behalf of the Contractor whose Equipment is being operated !
This applies to most countries which conform to or run along the lines of IMCA. ………………….. APART from Holland ! 😯
Make sure that the Company who employs you in Holland covers you as an individual under their Company policy. If you do not get this in writing or email BEFORE you work in Holland , YOU will be liable for any discipline that arises due to an Accident or incident.
I know this to be true and have also witnessed this on a few occasions with other people who had the misfortune to not realise this.

[James McLauchlan]

When operating as a limited co working in the UKCS you are expected to carry employers liability insurance to cover you working offshore

Sorry James . That is actually incorrect.
As a Ltd Company working as a Freelancer it is the responsibility of the owner of the equipment / Subcontractor to carry the Liability insurance.
In the UK , that would be the ROV Operating company. The Agency will also cover a Liability Insurance with Personnel operating through them ( IF the Agency does not provide this – Regardless of whether you are a one man ltd outfit or on their payroll …………….. STEER THE F#*k away from them ’cause you will have no leg to stand on in a court of law ! )
The Liability Insurance certificate ( Or copy , In date ) has to be provided at EVERY WORKSITE. This certificate covers all employees whether Hired . Salary or person acting on behalf of the Contractor whose Equipment is being operated !
This applies to most countries which conform to or run along the lines of IMCA. ………………….. APART from Holland ! 😯
Make sure that the Company who employs you in Holland covers you as an individual under their Company policy. If you do not get this in writing or email BEFORE you work in Holland , YOU will be liable for any discipline that arises due to an Accident or incident.
I know this to be true and have also witnessed this on a few occasions with other people who had the misfortune to not realise this.

I feel it’s not quote that clear cut.

I’m employed by my limited company. I provide my services under my company as an employee of that company. The way I understand it, it is the responsibility of my employer to provide employers liability insurance. When working on a contractors vessel as a client rep I don’t expect to be covered by the contractors liability insurance. When working as a Ltd co I have been asked on a few occasions to provide a copy of that certificate to the agency.

Our liability insurance covers us for all operations globally, except the USA which would be assessed on a case by case basis.

It would be good to hear some other opinions/experience on this. So have started a thread for that very purpose:

UK – Employers liability insurance – Yes or no?

[Andy Shiers]

Steer clear of that Agency , James !
If an "Agency" ( Or Leech as I call them ) want to make a penny on the backs of us and whether they are abroad or in the UK ……………. THEY have to provide a Liabilty Insurance coverage REGARDLESS you are LTD company or "On their books" as a PAYE.
As you know the Liabilty Insurance has crept up, then gone Skyrocket in the last 5 years. And we all know that " AGENCIES " are springing up like weeds all over the place thinking they can make a quick buck on us ! 👿
These agencies asking you to pay for the Liabilty is one sure way of cutting these so called Agencies out !
It also proves where their loyalties and respect in the personnel and recoginition in their profession.

[Andy Shiers]

If they will not do it …………. STEER CLEAR OF THEM !

[T-Boy]

Not confusing….then please tell me what an "employee" is in the eyes of the taxman, with regards to SED?
And please don’t say an employee with regards to SED is looked at the same way as a person working for a company full time on a permanent contract, as this is clearly not the case..
Who would have thought that even if you consider yourself self employed as you are paid gross, and jump from job to job, the fact is according to my past accountant is that may not be the case, as you don’t provide your own tools to carry out your job and you don’t pay your own airfares etc…so what does self employed mean in the eyes of the taxman with regards to SED….not confusing…are you serious mate…maybe not for you but for most it is..

Take a look on their website. It will reveal that even HMRC can’t tell you the definition becasue they deliberatly make it so wooly that if you bend far enough, they will ream you either way. Every accountant has a different opinion, and that’s all it is, an opinion, because even accountants can’t work HMRC rules out 100%

I am a strong believer in solidarity, and if enough people were to move away from HMRC’s grip by avoiding work on the UKCS and UK agencies, then retrospective changes would have to be made, this means being brave…a short commodity these days I guess.

Stay off the UKCS, away from UK agencies and go for foreign agencies. HMRC has neither the balls nor the resoursces to take on overseas intermediaries….c’mon they can’t even sort UK taxation out properly.
They only prey on the weak.

Don’t want to drift too far off topic. Rule # 253 Whenever working via an agency, self employed, via an umbella or what have you, always get a copy of the agency or intermediaries public liability or proffesional indemnity insurance certificate!

I wish I was better at wording I’d bang an epetition together…unless anyone would like to help?

[Author]

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