New proposal from IPSE - Smoke and mirrors?

[tractor]

Whereas...

Phillip Ross has articulated the original view of what this should be and how it will work, down to details such as a fixed salary/dividend ratio. IPSE have so far only suggested in their manifesto that the idea should be explored in detail but have not decided on any of the operational functionality (and if they had are unlikely to spread it around ahead of the discussions anyway). People have conflated the two into a single firm proposal.

The Ross version has many risks as has been said by many (and with which I agree to some extent, if that was what was to be implemented). However, nothing has been agreed and panic at this stage is pointless. IPSE's version will be developed in consultation with its members which I have no doubt will reflect most of the understandable fears that have been expressed so far.

But as of now it IPSE's version remains a concept, not a firm proposal.

HTH (and FTAOD, that's all I'm going to say on the subject ).

But of course it is.

And yet, IPSE want it to happen in the first finance bill of the next parliament, which doesn't give much time to put any meat on the bones.

Unless there is already meat there, but only for the select few who can see it.

+1

Particularly since the PCG and LFIG had discussions prior to Philip Ross and Andrew Burke writing their report.

Exactly.


I really would like to know why IPSE is so far behind the curve on this.

[Batcher]

If I'm forced to close down my Ltd of 20 years and chuck my non-fee earning Company Secretary on the dole to start up a FLC, I might as well just jack it in as well.

Maybe that's what they want, of course?

[tractor]

...

If I'm forced to close down my Ltd of 20 years and chuck my non-fee earning Company Secretary on the dole to start up a FLC, I might as well just jack it in as well.

Maybe that's what they want, of course?

It is what they (HMRC, Labour and Tories) have wanted for decades. They failed with IR35 and for a while they have been going upstream and placing more and more burdens on our pipeline until agents and clients alike will not deal with us as Limiteds.

[TheFaQQer]

If I'm forced to close down my Ltd of 20 years and chuck my non-fee earning Company Secretary on the dole to start up a FLC, I might as well just jack it in as well.

Maybe that's what they want, of course?

You won't be made to - it'll be optional

[RasputinDude]

You won't be made to - it'll be optional

I know that you and I agree on this - but way too many people actually think that this is going to be the case.

This is a seriously carp idea. It will not be optional - or to be more correct, it will be as optional as it currently is to be a contractor as someone that is registered self-employed. For which - read it won't be optional. Agencies will very quickly only accept PSCFLC entities.

[malvolio]

But of course it is.



+1



Exactly.


I really would like to know why IPSE is so far behind the curve on this.

And you wonder why I've given up trying to say anything...

[TykeMerc]

And you wonder why I've given up trying to say anything...

Probably because your credibility on the whole subject is nil, plus people just don't believe the party line being spread by the IPSE posters on here (when they let off with the arrogance and sarcasm).

It's clear the this "optional" FLC will be IR35 by the back door, the "fair" split of salary and dividends will be set by HMRC, that income splitting will be gone so spouses that have a genuine role will be out in the cold and that HMG get all the goodies they can dream of.

It will be as optional as putting fuel in your car, you only have to if you actually want to use the damn thing.

[d000hg]

Can't say I do - from what I can make out you'd still have the hassle of running your own company (with some additional paperwork) but you'd take home less money - no effect on what we do

In the long-winded General thread, everyone is only assuming that's the case. That such a new entity will be set up as a voluntary option. Then everyone will be forced to use it. Then it will be taxed far more heavily, effectively making everyone inside IR35.

Considering it's all speculation about something in the preliminary stages of being proposed, that seems to be jumping the gun. Most people seem to be opposed to it just for change's sake. The government could equally tighten up IR35 and decide everyone is inside with the current set up.

[TheFaQQer]

In the long-winded General thread, everyone is only assuming that's the case. That such a new entity will be set up as a voluntary option. Then everyone will be forced to use it. Then it will be taxed far more heavily, effectively making everyone inside IR35.

Considering it's all speculation about something in the preliminary stages of being proposed, that seems to be jumping the gun. Most people seem to be opposed to it just for change's sake. The government could equally tighten up IR35 and decide everyone is inside with the current set up.

Do you believe that the government of the day (whichever that may be) will introduce a new corporate vehicle for 4.5million workers which lowers the tax take?

I don't.

However, the IPSE powers that be position is that their predictions are going to be accurate (it won't be mandatory, it won't increase your tax burden, it will be simple to operate, there will be no IR35 worries, there will be no expensive accounts to do etc.) whereas anyone who believes anything differently is wildly speculating about things that will never some to pass.

The only people that have put forward a detailed proposal are LFIG and Andrew Vessey from Qdos. IPSE have nothing in the public domain, so one can only speculate based on the details that are available. If the IPSE staff and board (or whoever is running the policies) cared to put something out there, then it might be different - but silence in this case really isn't golden.

[d000hg]

Do you believe that the government of the day (whichever that may be) will introduce a new corporate vehicle for 4.5million workers which lowers the tax take?

I don't.

I doubt it either. But not everything is about tax. It could benefit UKGov if all that happened was they could stop spending money on IR35, and knew more accurately how many freelancer/contractors there WERE, even if the tax take stayed the same.

Many people would gladly pay a little more tax to escape the uncertainty of IR35 - and the need to pay for expensive IR35 reviews and insurance. I bet a lot of people would even be 'happy' as long as the amount of tax they paid didn't exceed what they would pay in PAYE as a permie earning the same amount, even!

I choose to be about as tax efficient as is possible through my Ltd once I had one, because why wouldn't you, but I didn't set up a Ltd for that purpose. If something simpler and more tailored had existed, with a clearly defined tax/NI setup that wasn't drastically expensive, I'd have done that instead.

Opposing something not because of what it will achieve but how it could be tinkered with in the future, seems pointless to me.