What is your tax opinion on agency contract work?

[James McLauchlan]

We’ve read a lot about this subject recently, but how do you view your tax implications based on agency day rate work?

I guess a consideration that should also be taken into account is what you are being told (or not being told) when you take work with an agency.

[ROV_Monkey]

Had a phone call from UKPS today, do I fancy a job? Apparently they’re short on bodies – I wonder why! 😈

They can poke it

Monkey

[Steve]

Just a thought on poking it with UKPS..

Have you been in touch with them on the SED issue? If you contact Andy Stewart there, he will forward a letter to you that UKPS have received from HMRC on the subject, which pretty much clears everything up. I did….and he did.

Don’t get me wrong, I don’t work through UKPS myself. But isn’t it better to be fair to them and get first hand info from the horses mouth before knocking back what could be a nice little job and a nice little earner.

[rovnumpty]

James, monkey ,etc.

Apparently, as off the 6th of April this year, UKPS has arranged with the UK taxman that any PAYE personnel working for them WILL be treated as employees for the matter of taxation.

I say apparently as I heard this from UKPS, not the taxman. A such, I’m treating it with a healthy dose of scepticsim. I reckon they’d say anything right now to try and keep guys going through their books.

Please note that this only applies from this tax year forward, not backward. So if you’re one of the unfortunate souls being chased by el taximan for SED from prevoius years due to UKPS’s F*** up, this is of no use to you whatsover.

[Seatechs]

All offshore personnel working for Seatechs are paid via Seatechs (Guernsey) Ltd, and get the option to be PAYE or Gross, obviously if you are PAYE tax and NI are deducted, paid to HMCR and reflected in your payslip, if you are gross, then all tax and NI contributions are your responsibility, unless you are in Norway, then it also becomes our responsibility, but it is your choice which way you want to go, PAYE or gross. We have never had a problem with UK tax deductions from either the Taxman or the employees.
I don’t fully understand what the issue is here!! if you are PAYE you are exactly what it says, Pay As You Earn, we’ve always found it very simple, as a company, we are legaly obliged to make the deductions from any PAYE employee, so unless other agencies are not working to and paying as per HMCR regs i can’t see why there should be any problems.

[pipetracker]

All offshore personnel working for Seatechs are paid via Seatechs (Guernsey) Ltd, and get the option to be PAYE or Gross, obviously if you are PAYE tax and NI are deducted, paid to HMCR and reflected in your payslip, if you are gross, then all tax and NI contributions are your responsibility, unless you are in Norway, then it also becomes our responsibility, but it is your choice which way you want to go, PAYE or gross. We have never had a problem with UK tax deductions from either the Taxman or the employees.
I don’t fully understand what the issue is here!! if you are PAYE you are exactly what it says, Pay As You Earn, we’ve always found it very simple, as a company, we are legaly obliged to make the deductions from any PAYE employee, so unless other agencies are not working to and paying as per HMCR regs i can’t see why there should be any problems.

OK. Does this also mean that Seatechs pay employers NI contribution? This is what I believe in the eyes of HMRC make you the employer. The issue here is that a lot of guys thought they were PAYE with UKPS as they (UKPS) were deducting tax and employees NI but were not paying employers NI.

[Steve]

If you’re PAYE through an agent, the agent does indeed pay employers NI contributions. However, what you need to realise is that it is taken off your dayrate before you get it. You then pay your own personal NI and income tax from the remainder.
So, eg, the gross dayrate is £400. Around 12.5% will be deducted by the agent to cover their employers NI costs. So you receive around £350 as your dayrate. You’ll then pay personal tax and NI out of that £350.
I’ve yet to find an agen that doesn’t work this way with PAYE guys. If anyone knows different, let us know.

On the upside……as PAYE you can claim the 100% SED 😀 , if you qualify.

[rovnumpty]

Just to add to the confusion on this matter

The taxman recently- as in the last couple of weeks- decided that OK, as an agency PAYE bod, you were an employee of the agency.

However…..

The taxman also decided that they will treat each trip offshore as a seperate employment, meaning you need a foreign port call on EACH and EVERY trip to qualify for the Seamans Earning Deduction.

This is in regard to a case from several years ago, but they will no doubt apply it any and all future claims.

[James McLauchlan]

I can’t figure why the taxman is messing around with this. We all know that it’s going to be knocked on the head eventually.

It’s such a grey area it seems. Why don’t they just pass some legislation along the lines of ‘If you are an offshore worker in the energy business, but not regular ships crew, then you will not be entitled to Seamans Earning Deduction’?

That would remove the confusion reigning now and the pain experienced recently by some people.

It needs sorting out once and for all…. either that, or move out-with the UK and be done with it. Plenty of nice places in Europe to hang out and still work offshore. As a resident of an EU country as long as you can prove to the UK agency that you are registered in your country of residence, have a letter from your local accountant to say that they look after you tax affairs, and have a local tax number then you will be fine.

[K2]

Rx’d this recently:

If you work through UKPS on a paye basis you will be treated ‘as an employee’ by HMRC with regard to seafarers earnings deductions. We have a letter from the Norwich tax office stating that as of 5th April 2008 that they will treat paye personnel working via UKPS as ‘employees’ for seafarers tax rebates under the seafarers tax deduction scheme. To my knowledge UKPS are in fact the only agency to have received such warranties in writing over the seafarers tax scheme.

😉

[Ray Shields]

I can’t figure why the taxman is messing around with this. We all know that it’s going to be knocked on the head eventually.

It’s such a grey area it seems. Why don’t they just pass some legislation along the lines of ‘If you are an offshore worker in the energy business, but not regular ships crew, then you will not be entitled to Seamans Earning Deduction’?

That would remove the confusion reigning now and the pain experienced recently by some people.

But they would have to define "regular ships crew".

The easiest way is to say "only those ships crew who sign onto ships articles" can claim – that would then leave only the true ships crew able to claim.

[Paulie]

We’ve read a lot about this subject recently, but how do you view your tax implications based on agency day rate work?

I guess a consideration that should also be taken into account is what you are being told (or not being told) when you take work with an agency.

My reading of the Agency Legislation on the HMRC website is that under agency regulations most members of this site would likely be entitled to be PAYE with any company that acts as an agency.

[edited: deleted the extraneous bit]

[Gamekeeper]

I thought this thread was a discussion regarding "What is your tax opinion on agency contract work?" Not a discussion regarding who should be eligible to claim SED?

[Paulie]

My reading of the Agency Legislation on the HMRC website is that under agency regulations most members of this site would likely be entitled to be PAYE with any company that acts as an agency.

A week later and I think slightly differently! As a Ltd company it seems you can opt out of the Agency Regs. But as an individual I don’t think you can – result: you really have no choice other than to be PAYE if you work through a third party [agency]. Could anyone verify this?

[James McLauchlan]

….result: you really have no choice other than to be PAYE if you work through a third party [agency]. Could anyone verify this?

As a British citizen? Not if you reside in another EU country and can provide evidence to the agency of your residency, tax number, accountant. etc.
Basically providing proof to the agency that you are meeting the tax requirements of the EU state you live in. In many instances this liability is much lower that the UK.

best regards
James Mc

[Author]

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